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2 equity firms reportedly lead in bid for Chrysler

From the Associated Press

Two private equity firms appear to be front-runners in the quest to buy Chrysler Group, the troubled U.S. arm of DaimlerChrysler.

Cerberus Capital Management and a consortium of investors headed by Blackstone Group and Centerbridge Partners spent much of last week at Chrysler’s Auburn Hills, Mich., headquarters crunching numbers and meeting with top executives, a company official said Tuesday.

The Chrysler official, who spoke to the Associated Press on condition of anonymity because of the sensitive nature of the talks, said potential bidders were studying Chrysler’s finances.

Canadian auto parts maker Magna International Inc. and General Motors Corp. also reportedly have looked into buying all or part of Chrysler. Private equity firms Apollo Management and Carlyle Group also are said to be interested.

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Spokesmen for the private equity firms haven’t talked about the issue and GM won’t confirm or deny the reports.

Magna’s top executive has confirmed his company’s interest.

Although Magna remains interested, KeyBanc Capital Markets analyst Brett Hoselton said in a note to investors that his sources, whom he did not identify or describe, indicated that the likelihood of the Canadian company taking a stake in Chrysler recently had declined.

“Our sources have indicated that Cerberus and Blackstone have emerged as the leading contenders to acquire Chrysler, and that due to valuation issues, [Magna] is now playing a smaller role in the sale process,” Hoselton’s note said.

Analysts have speculated, however, that Magna might join with a private equity firm in buying parts of Chrysler.


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