Chrysler Group has submitted documents pertinent to an initial public offering (IPO), which is expected to determine the real value of the carmaker, thereby resolving a row between Fiat and a United Auto Workers retiree health care trust fund. Chrysler, however, says that an IPO may "prevent or delay" aims of Fiat-Chrysler chief executive Sergio Marchionne to merge the two carmakers.
Fiat currently owns 58.5 percent of Chrysler while the trust fund, known as VEBA, holds the rest. In an S-1 filing with the United States Securities and Exchange Commission, Chrysler said it was informed that Fiat is reconsidering the “benefits and costs of further expanding its relationship” with the US carmaker as well as the terms on which Fiat would continue the “sharing of technology, vehicle architectures and platforms, distribution networks, production facilities and engineering and management resources."
VEBA decided in January 2013 to sell part of its 41.5 percent stake in Chrysler in an IPO. Analysts and bankers see the IPO filing as a move by VEBA to get a better offer from Fiat, with many betting that the public offering will never occur. Marchionne said in mid-September that an IPO, should it occur, would take place in the first quarter of 2014.
Marchionne has been instrumental in leading Chrysler’s comeback that has raised its valuation to around $10 billion, according to some analyst estimates. VEBA adviser Brock Fiduciary is pushing a price tag of over $5 billion for Chrysler, representing the highest possible payout under the terms of the carmaker’s bankruptcy agreement. According to the SEC filing, VEBA is offering $100 million of shares. [source: Chrysler]