Financial investors close in on Chrysler
LONDON/GENEVA (Reuters) - Private equity investors closed in on Chrysler on Tuesday as rival automakers at the Geneva car show displayed scant interest in DaimlerChrysler's DCXGn.DE loss-making U.S. division.
U.S.-based buyout firm The Blackstone Group BG.UL has approached Chrysler and been granted access to its books in preparation for a possible bid, a person familiar with the situation said.
But he said there was no guarantee that the firm, already an investor in Germany's Deutsche Telekom (DTEGn.DE), would make an offer for Chrysler.
Blackstone, which has experience in the industry as majority owner of TRW Automotive (TRW.N) and formerly as an investor in American Axle and Manufacturing (AXL.N), declined to comment.
DaimlerChrysler Chief Executive Dieter Zetsche gave reporters at the auto show in Geneva no details on the status of a strategic review of Chrysler announced last month by the world's fifth-biggest carmaker.
Chrysler, the most dependent of the big Detroit carmakers on light trucks and sport utility vehicles at a time of high fuel prices, had a 2006 operating loss of 1.12 billion euros ($1.47 billion) and launched a restructuring plan that will cut 13,000 jobs and close a plant as it tries to return to profit by 2008.
The Detroit News reported that representatives from Cerberus Capital Management CBS.UL, another buyout firm, met executives from Chrysler on Monday to consider a bid.
General Motors Corp GM.N Chief Executive Rick Wagoner declined to comment on whether the world's largest automaker was interested in Chrysler. "There's nothing we want to say about it," he told reporters at the Geneva show.
Sources have previously told Reuters GM has held preliminary talks with DaimlerChrysler about an acquisition of Chrysler or some kind of alliance.
NOT INTERESTED
Other car manufacturers continued to rule themselves out of bidding for the Detroit-based business.
PSA Peugeot Citroen (PEUP.PA) Chief Executive Christian Streiff said at the Geneva show that PSA was focused on improving quality and profitability and therefore "did not have time" to look at Chrysler.
Germany's Volkswagen AG (VOWG.DE), Italy's Fiat SpA (FIA.MI), France's Renault SA (RENA.PA), Japan's Nissan Motor Co. Ltd. (7201.T) and South Korea's Hyundai Motor Co. Ltd. (005380.KS), have all said they are not interested.
BMW (BMWG.DE) Chief Executive Norbert Reithofer joined the club by declaring in Geneva that the world's biggest premium carmaker had no interest in Chrysler.
DaimlerChrysler stock was up 1.4 percent at 51.16 euros by 1305 GMT, while the DJ Stoxx European car sector index .SXAP gained 1.2 percent.
"DaimlerChrysler trades at a substantial premium to the sector average on 2007 price/earnings ratios, but we believe that at the moment this does not matter. The prospects of perhaps selling Chrysler have in our view improved sentiment drastically," Bank Sal. Oppenheim said in a research note.
Two sources close to the situation told Reuters last week that a detailed sales prospectus for Chrysler Group bidders should be completed soon, the first step toward a potential sale s on fuel-efficient cars and engines, was robust and would at least hit its target of generating an operating margin of 2.5 percent at Chrysler by 2009.
Zetsche declined to give any details about what lay in store for Chrysler or when a decision was due, but said the matter would certainly be resolved before 2009.
-- Additional reporting by Marcel Michelson and Kevin Krolicki in Geneva
