From AFX News Limited
LONDON — The Blackstone Group and Cerberus Capital Management, two of the largest U.S. private-equity firms, have made formal bids to buy the Chrysler Group from DaimlerChrysler AG, The Detroit News reported, citing people close to the talks.
No details were known about the size of the bids, but the offers were said to qualify both firms to compete in the next round of the Chrysler sale process.
A third prospective buyer — Canadian supplier Magna International Inc — also has submitted an offer that keeps it in the running to acquire the U.S. division of DaimlerChrysler, it said.
DaimlerChrysler is expected to choose one bidder as an exclusive negotiating partner by the end of April, according to people familiar with the situation.
The bidders, however, could face stiff opposition from union leaders in North America and Germany, a union official told The Detroit News late Tuesday.
A dozen union officials including United Auto Workers President Ron Gettelfinger met for dinner in Berlin Tuesday and reaffirmed their position: that they hoped Chrysler would remain a part of DaimlerChrysler and opposed a sale of Chrysler to a private equity group or other buyer that would dismember it.
"We would not support a private equity group, or a combination of a private equity group and corporation, that would seek the destruction of our jobs," said Bob Chernecki, an assistant to Canadian Auto Workers President Buzz Hargrove who attended the dinner, which was also attended by Erich Klemm, a German union leader who is vice chairman of DaimlerChrysler’s supervisory board.
Chernecki said about "20 to 25 entities" have shown interest in Chrysler, judging from the number of people who have called on union leaders to discuss a potential deal for Chrysler.
He confirmed that only a "handful" of bidders are serious.
The potential sale of Chrysler is expected to be a major topic today at DaimlerChrysler’s annual shareholders meeting in Berlin.
The paper said people close to the process said Blackstone, Cerberus and Magna delivered their offers recently to J.P. Morgan Chase, the investment banker hired by DaimlerChrysler to handle a Chrysler sale.
The exact amount of the bids is unknown, but a source close to DaimlerChrysler said the automaker is hoping for a price of about $8 billion for Chrysler.
With three bidders on board, DaimlerChrysler will begin evaluating the contenders with a goal of picking one to negotiate with exclusively.
That decision is not expected before the end of April, the report cited people familiar with the talks as saying.
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