Chief Executive Sergio Marchionne wants to discourage investors from participating in Chrysler Group LLC’s initial public offering, signaling the move at a conference last week.
At a Bernstein Research investors conference that took place last week in London, Marchionne, who is CEO for Fiat SpA as well, said the US automaker is attractive financially n the near future, but he “did not believe investing via this partial IPO would be the most attractive route for investors.”
Marchionne hinted that on the other hand sending money to Fiat or investing in the joint Fiat-Chrysler company later on would be the better move, as the CEO tried to discourage the investors from participating in the process that was brought on by the automaker’s second-largest shareholder last month.
Marchionne wants to skip altogether the IPO by having Fiat acquire the remaining of Chrysler from a union-affiliated retiree healthcare trust, which was granted the stake in Chrysler as part of the third-largest U.S. automaker’s federal bailout in 2009. Because Fiat considers the $5 billion demand from the healthcare trust for its stake in the company as overpriced, the latter moved to exercise its right to call for an IPO, aiming to putt further pressure on Fiat.