Chrysler to set price range for IPO as early as this week

Article by Anita Panait, on November 26, 2013

Chrysler Group is expecting to establish a price range for its initial public offering this week at the earliest, the Wall Street Journal reported, citing people privy with the matter. According to the report, the move will put more pressure on owners Fiat and VEBA (voluntary employee beneficiary association) to reach an agreement that would allow the Italian carmaker to obtain full ownership of the US company before the IPO occurs.

The Journal said that Chrysler expects to complete the IPO – which could raise $1.5 billion to $2 billion -- in the first half of December as it will try to beat the market slowdown during the holidays.

The expected price range would indicate Chrysler’s value at between $9 billion and $12 billion, based on the 16.6-percent stake that VEBA, a retiree healthcare trust affiliated with the United Auto Workers union, has asked the US carmaker to register for the IPO. Based on the proposed IPO price, VEBA’s total 41.5-percent stake in Chrysler will have a value of between $3.7 billion and $5 billion.

VEBA had valued its stake in Chrysler at $3.6 billion at the end of 2012, according to a filing with the US Department of Labor. Chrysler filed IPO documents in late September after its majority parent Fiat failed to reach a buyout deal with VEBA. Fiat is seeking to buy out VEBA’s shares in Chrysler, but is not in agreement with the trust’s $5-billion asking price.

In response, VEBA exercised a right entombed in Chrysler's 2009 government-financed bankruptcy to launch an initial public offering, as part of its bid to compel Sergio Marchionne, chief executive of both carmakers, to strike a deal. Reuters reported last week that Chrysler had added four banks to help underwrite the IPO and that the automaker was looking to launch the deal as soon as early December.

Topics: chrysler, ipo

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

Hyundai is making the green vehicle race more competitive by offering three powertrain types -- pure electric (EV), hybrid (EV plus combustion engine) and plug-in hybrid (PHEV) – in one...
by - December 9, 2016
Although specs for the new Renault Megane had already surfaced several weeks ago, we didn’t know that the company has cooked up something new. Aside from the 200hp gasoline, Renault‘s...
by - December 9, 2016
For the first time in fifty-eight years, Infiniti registers its first US-Spec Q60 Coupe in Cuba. American products have not been allowed entry into Cuba for six decades. But it...
by - December 9, 2016
Chevrolet has already given out the pricing for some of its 2018 Equinox models. Not only will the new Equinox be available in both the US and Canada, it is...
by - December 9, 2016
Nearly all details have been set with regards to the upcoming market introduction of the new Jaguar I-Pace. Its production version was recently previewed at the 2016 Los Angeles Auto...
by - December 8, 2016
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries