Fiat Looks to Buy Rest of Chrysler Ahead of IPO
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Italian automaker Fiat S.p.A. (OTCBB: FIATY) is looking to purchase the rest of Chrysler LLC (NYSE: CGC) and recent IPO valuations aren't helping the process.
Bloomberg said today that Fiat and reps from the United Auto Workers retiree health-care trust met this week to talk about the trust's 41.5 percent stake. The gap between the two sides has narrowed with Fiat willing to pay $4.2 billion and the trust looking for $5 billion.
Numbers come following recent submission of IPO paperwork to the U.S. SEC for Chrysler's IPO. The Street has valuations ranging from $10 billion up to $19 billion. However, Fiat has the right to acquire the stake for $6 billion if talks drag on, meaning the trust couldn't ask for $7.9 billion based on the $19 billion valuation.
The UAW retiree health-care trust needs to maximize the value of the stake; recent reports have costs of the trust about $3.1 billion more than its assets are worth, according to an October filing.
Shares of Fiat are up 1.2 percent.
Bloomberg said today that Fiat and reps from the United Auto Workers retiree health-care trust met this week to talk about the trust's 41.5 percent stake. The gap between the two sides has narrowed with Fiat willing to pay $4.2 billion and the trust looking for $5 billion.
Numbers come following recent submission of IPO paperwork to the U.S. SEC for Chrysler's IPO. The Street has valuations ranging from $10 billion up to $19 billion. However, Fiat has the right to acquire the stake for $6 billion if talks drag on, meaning the trust couldn't ask for $7.9 billion based on the $19 billion valuation.
The UAW retiree health-care trust needs to maximize the value of the stake; recent reports have costs of the trust about $3.1 billion more than its assets are worth, according to an October filing.
Shares of Fiat are up 1.2 percent.
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