NEW YORK: DaimlerChrysler AG is sending a top executive to New York to meet with bidders for its loss-making U.S. arm, Chrysler Group, according to newspaper reports. However, it is unlikely that the executive will be meeting billionaire Kirk Kerkorian, who has made an offer of $4.5 billion for the carmaker.
According to Wall Street Journal, Rudiger Grube, management board member of DaimlerChrysler, who is reaching New York Wednesday, is not scheduled to meet representatives of Kerkorian's Tracinda Corp., which had announced the bid. The investment firm had been actually preparing for a meeting, the paper said.
Grube is expected to meet the private equity firms which are vying for the unit. These include Blackstone Group, Centerbridge Capital Partners LP and Cerberus Capital Management LP. He is also scheduled to meet representatives of the group constituting Canadian auto-parts supplier Magna International Inc. and private-equity firm Ripplewood Holdings Inc.
Meanwhile, according to sources, Kerkorian's offer is much below those put forth by the other bidders. Also it is full of conditionalities like DaimlerChrysler required to handle part of the pension and health care liabilities of the company.
The offer has also been opposed by labor unions. Canadian Auto Workers union has publicly said it is opposed to the offer.
The Wall Street Journal report said DaimlerChrysler would not want to discriminate against Kerkorian. The company would consider his bid if he is to improve it.
