Canadian firm considers acquiring Chryslerby Nick Aziz
Canadian auto parts supplier Magna International and a private-equity partner have offered to buy the Chrysler Group from DaimlerChrysler for $4.7 billion, according to a report by KeyBanc Capital Markets analyst Brett Hoselton.
Hoselton said the bid is low, but given Chrysler's questionable valuation, investors should take it serious. And they have -- shares of DaimlerChrysler hit a 52-week high today on the speculation.
Most analysts value Chrysler between nothing and $13 billion. Some observers feel the company has no value, because its liabilities outweigh its assets. Others feel it could be worth at least a third of the $36 billion Daimler-Benz paid in 1998 to the right buyer.
Even if Magna's offer is overlooked for the company as a whole, it could be offered a minority stake in Chrysler. Magna "also sees it as an opportunity to purchase an inexpensive stake in the automaker should other bidders retreat."
Recent rumors suggest General Motors might also be interested in buying Chrysler. Chrysler could add as much as $9 billion in value to GM due to products and "operating efficiencies including reduced research and development and advertising costs per vehicle," Jon Rogers, an analyst at Citigroup.
DaimlerChrysler's stock surge today makes it clear investors are anxious to dump the struggling Chrysler Group. A recent proposal made by two major shareholders calls for DaimlerChrysler to consider a name change "” possibly back to Daimler-Benz "” in an effort to disassociate it from the "failure" of the Chrysler Group.