Tracinda offers to purchase Chrysler Group for $4.5 billion in cash

By Lisa Kerner

Charlotte, N.C., April 5 - Tracinda Corp., led by Kirk Kerkorian, has offered to acquire the Chrysler Group from DaimlerChrysler AG for $4.5 billion in cash. The offer includes a good faith deposit of $100 million , one-fourth of which is non-returnable should the deal fall through.

In its preliminary offer letter, Tracinda said it has been "following Chrysler closely and studying publicly available materials. And 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."

The offer would be conditioned on reaching both a new satisfactory collective bargaining agreement with the United Auto Workers Union and an "equitable arrangement" with DaimlerChrysler unfunded pension liabilities and health care costs, a company news release stated.

Tracinda said it plans to build and strengthen Chrysler as an independent entity by partnering with the United Auto Workers and senior management of Chrysler.

Chrysler does not need a quick fix, Tracinda noted, but "a lasting fix that builds on the fundamental requirements in the automotive industry of product newness and quality, and in the process provides returns not only to the investors, but to the employees as well through their ownership stake," the letter stated.

DaimlerChrysler is an automaker based in Stuttgart, Germany.

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