Is Chrysler considering IPO?

Word emerges that Chrysler could be considering taking company public again

By Rod Meloni - Reporter, CFP ®

DETROIT - Over the past five years it truly has been a roller coaster ride for Chrysler.

The company's fall has been well-documented. And today, that comeback is nearly complete as word emerges that Chrysler could be considering taking the company public once again.

This is an old fashioned case of haggling, the car maker Fiat says Chrysler is worth one amount and the United Auto Workers healthcare trust says it's worth another.

The tables are turned in this case it's the car company that's buying and trying to haggle that price down lower.

Sergio Marchionne is known as a negotiator's negotiator.

That's how Fiat wound up with control of Chrysler without spending money in the first place, as part of the bankruptcy and federal bailout.

--Sergio Marchionne

His goal is for Fiat to get 100 percent of Chrysler, but the UAW VEBA owns nearly 42 percent and it's driving a hard bargain for its own stake; a stake it cannot sell outright anyway.

Global Insight auto analyst Stephanie Brinley says there's a lot of gamesmanship here.

"They're negotiating in public a little bit here, Fiat's, Sergio's drawing his line in the sand so this is what I'm willing to pay and the VEBA wants more and the court hasn't worked in his favor to this point," she said.

This dispute ended up in court. And the judge would like to set the stock price in a trial that could take six months or more.

Marchionne is impatient, so he's likely going to filed with the US Securities and Exchange Commission for an initial public stock offering to get 25 percent of the VEBA shares on the market that would set the price of what the shares are worth.    

"It's possible that the market doesn't really value it as VEBA does so there's a slight risk that they won't get as much as they think that it's worth, but there is an upside that they might and get more than fiat is willing to give them," said Brinley.

The filing could come in the next several days if what Marchionne said in the Financial Times Today holds up.

Marchionne wants to fully marry these two companies as soon as possible because Chrysler is profitable now and Fiat is not.

The European economy appears to be bottoming out and Marchionne want to be in full control when it does come back.

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