Chrysler gears up for float to let investor exit

 
City A.M. Reporter
US CAR firm Chrysler plans to file documents this week that would allow its minority investor to sell shares in a stock market listing, bringing to a head a battle with majority owner Fiat, which wants to take full control of the business.

Italian group Fiat wants to buy the 41.5 per cent stake in Chrysler held by VEBA, a healthcare trust affiliated to the United Auto Workers union, to secure access to cash flow and technology it needs to compete against rivals.

But VEBA is not happy with the price Fiat has offered.

Although a listing would drag out the sale process for VEBA, it will be hoping to get a better price from investors or to force Fiat to increase its offer.

Meanwhile Fiat, which already owns 58.5 per cent of Chrysler, will be hoping the stock market’s valuation of the US carmaker will show its existing offer is VEBA’s best option.

“It’s in the interest of both parties, but of Fiat in particular, to reach an agreement before a Chrysler IPO,” said ICBPI analyst Luca Arena.

Fiat boss Sergio Marchionne has been quoted as saying the US carmaker was planning to file documents with regulators for the stock market listing this week – earlier than expected.