Fiat offers Canadian govt $125 million for their final stake in Chrysler
While speaking with a group of reporters this weekend in Venice, Fiat and Chrysler CEO Sergio Marchionne stated that Fiat had offered the Canadian government $125 million for the 1.7% stake in Chrysler. According to Marchionne, Fiat placed their “bid” for the final piece of Chrysler under government control late last week and while there has been no official statement from the Canadian government, this appears to be a pretty fair price based on what Fiat paid for the last 6.6% purchase from the US feds.
Prior to Fiat SpA paying $500 million for the final 6.6% of Chrysler owned by the US, the Canadian government stated that they would be interested in selling their final 1.7% to Fiat - if the price was right. The Canadian department overseeing the handling of the Chrysler ownership was quick to state that they would sell their stake in Chrysler, but only after they saw what the US government received for their 6.6%. When Fiat paid $500 million for that 6.6%, it would amount to roughly $75.8 million per 1% so buying 1.7% based on the price paid to the US would put the sale price in the neighborhood of $128.9 million.
Using these numbers, Fiat would be paying the Canadian government slightly less than the Italian automaker paid for the US government’s portion of Chrysler but the deal between Fiat and the US also included buying options held by the US pertaining to the UAW retirees fund. The deal between Fiat and the Canadian government may be less involved and with less at stake, $125 million may be a price that the Canadians find to be acceptable. Should that be the case and the offer is accepted, the only portion of Chrysler not owned by Fiat SpA would be that portion held by the UAW fund.
As part of the $560 million purchase of 6.6% stake in Chrysler from the US, Fiat also purchase options to buy up to 40% of the stake held by the UAW and based on comments by Marchionne, Fiat aims to exercise those options in an effort to take control of as much of the company as possible. There is speculation that if Fiat manages to exercise the options that would bring their stake in Chrysler up to the range of 76%, the Initial Public Offering may be put off or unnecessary altogether.
Source: Automotive News
Other Chrysler News:
Fiat to buy final US gov’t Chrysler stake for $560 million
Chrysler leads the Big 3 in May 2011 growth
Canadian government may sell remaining stake to Fiat
Fiat plans to buy last 6.6% of Chrysler from US govt
A week behind the wheel of the 2011 Dodge Avenger Heat
Chrysler's Ram brand delivers its first plug-in hybrid pickups