Kirk Kerkorian, the billionaire US investor, has launched an all cash $4.5 billion (€3.35 billion) bid to take over troubled automobile maker Chrysler through his investment firm Tracinda.
"Tracinda intends to build and strengthen Chrysler as an independent entity by partnering with the United Auto Workers and senior management of Chrysler, and will offer the UAW and Chrysler management the opportunity to participate as equity partners in the transaction," Tracinda said in a press release yesterday.
"Tracinda believes by taking a long-term approach to solving Chrysler's problems, it can become a robust and lasting, standalone entity."
The offer could mean a return of Mr Kerkorian to the auto industry's centre stage. The investor recently sold his 10 per cent stake in General Motors. Before that he had spent several years in the mid-1990s pursuing Chrysler before it eventually merged with German carmaker Daimler in 1998.
In February, DaimlerChrysler said all options were open for the future of Chrysler's which is loss-making, effectively launching an auction. Since then there have been reports of interest from private equity firms including Cerberus Capital Management and a group of investors led by Blackstone Group, as well as from Magna, the auto parts maker.
Mr Kerkorian launched the bid via a letter to DaimlerChysler's board.
"Having been a major shareholder for over a decade we are very familiar with both Chrysler and the automotive industry, and have come to believe, all factors considered, that a private ownership approach is in the best interests of all Chrysler constituencies," Tracinda stated in the letter, addressed to Dr Dieter Zetsche, chairman of DaimlerChrysler.
Shares in Chrysler jumped $2.28 or 2.81 per cent to $83.35 on news of the bid.
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