According to a Wall Street Journal report that cited persons familiar with the matter, Chrysler Group LLC expects to set a price range for its initial public offering as early as this week to raise $1.5 billion to $2 billion.
The U.S. automaker expects to complete the offering in the first half of December in an effort to beat the IPO market slowdown around the holidays, the Journal said. Reuters reported last week that Chrysler had added four banks to help underwrite the IPO and that the automaker was looking to launch the deal as soon as early December.
Fiat, which owns 58.5 % of Chrysler, wants to take full control and buy out the rest of the stock owned by Chrysler’s second-largest shareholder, a retiree healthcare trust affiliated with the United Auto Workers union, but has balked at the more than $5 billion being demanded.
The expected price range would imply a total value for Chrysler of between $9 billion and $12 billion, based on the 16.6 % stake that the trust has demanded the company register for the IPO, the Journal said.
At the proposed IPO price, the trust’s stake will be valued at between $3.7 billion and $5 billion. It had valued its ownership stake in Chrysler at $3.6 billion at the end of 2012, according to a filing with the U.S. Department of Labor.