Chrysler says all options on its future are open

DaimlerChrysler will insist at its annual meeting today that "all options" are open over the future of Chrysler, but the market and shareholders are making it clear that there is only one option: to sell the US carmaker.

"The market shows them that it expects only one final outcome," said Henning Gebhardt, head of German equities at DWS,Germany's largest fund manager.

Daimler's shares have raced up by 30 per cent since its February 14th announcement that a sale was no longer ruled out for Chrysler.

The three parties thought to have bid for Chrysler are car-parts supplier Magna International, possibly in conjunction with private equity fund Ripplewood, buyout group Cerberus Capital Management, and a consortium of private equity firms Blackstone and Centerbridge Partners.

General Motors, which has explored the possibility of a tie-up with Chrysler, did not bid, but might enter the fray later.

All parties, including Daimler adviser JPMorgan Chase, declined to comment.

It is expected that an exclusive bidder will be chosen this month, possibly after a second round of bidding, but any deal would take several months.

People involved in the negotiations believe a difficult road lies ahead. "There is a reasonable chance that all the parties walk away," said one. Others stress that the rise in its share price means Daimler has little choice but to forge ahead with a sale.

Dieter Zetsche, Daimler's chief executive, will not give any update on the Chrysler situation at today's meeting, company officials say. However he is likely to face fierce questioning about other parts of the business, particularly Daimler's stake in aerospace group EADS.