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:


Login or Create new account to add a comment!


Many have been excited with the impending arrival of the next-generation Jeep Wrangler and the new 2019 Jeep Grand Wagoneer, which is slated to be the brand’s new range-topping model....
by - October 21, 2016
Chevrolet has taken the wraps off its new Chevrolet Colorado ZH2 at the fall meeting of the Association of the United States Army (AUSA). Tagged as the most extreme fuel-cell-powered...
by - October 21, 2016
Honda has unveiled the fifth generation of its hot-selling SUV – the 2017 Honda CR-V. The latest iteration of the CR-V should help it maintain its benchmark status in the...
by - October 21, 2016
Many are already expecting BMW to launch an ultra luxurious SUV that will serve at its new flagship by late 2018. Larger than the X5 and X6, the new X7...
by - October 21, 2016
Most of you may have heard or already have one of those autonomous home appliances doing the house chores. Thus, it’s not anymore unusual to see a car going places...
by - October 20, 2016