Chrysler invites IPO pitches, leaves door open to Fiat buyout
By Soyoung Kim and Arno Schuetze and Philipp Halstrick
NEW YORK/LONDON (Reuters) - U.S. carmaker Chrysler has asked banks to pitch next month for a mandate to run a potential public listing of its shares, four sources said, as parent Fiat FIA.MI wrangles with minority shareholder VEBA over a possible buyout.
Chrysler will interview investment banks in April for a underwriting role in a proposed initial public offering (IPO), sources familiar with the matter told Reuters on Thursday.
Three of the sources said bankers had been asked to prepare a "dual-track" sale leading either to the flotation of Chrysler shares owned by a United Auto Workers union retiree healthcare trust, VEBA, or an agreed buyout of its stake by Fiat.
A Chrysler Group spokesman said he had not heard of an April meeting of bankers for an IPO.
Fiat declined to comment.
Fiat owns 58.5 percent of Chrysler, while the other 41.5 percent is owned by VEBA.
Sergio Marchionne, chief executive of both Fiat and Chrysler, has long wanted to merge the two but has said he would be open to an IPO if Fiat and VEBA could not reach a deal.
Fiat has options to buy blocks of shares from VEBA, but its attempts to exercise them has been contested in court over their valuation. An IPO pitching process could provide a way of independently valuing the company and settling the argument. Continued...