AUBURN HILLS – Chrysler Group has filed plans for an initial public offering as the U.S. auto maker takes its first step to return to the market, a move that has angered Fiat CEO Sergio Marchionne. Fiat owns majority interest in Chrysler and wants to acquire the 41.5 percent owned by the United Auto Workers retiree health-care trust.
In a filing with the U.S. Securities and Exchange Commission, Chrysler said the UAW trust would receive net proceeds from the offering. The filing also sought to provide an implied fair value for Chrysler. Based on share units payments to Chrysler executives and directors at the end of last year, valued at $9 a share, Chrysler’s enterprise value stands at about $8.82 billion.
The initial filing doesn’t indicate a range in which Chrysler expects to price the shares, and also doesn’t say where the company intends to list its shares.
Marchionne wants to own Chrysler outright, and merge the two companies into a single, global auto maker.
“Fiat has stated that it believes a publicly-traded Chrysler Group will prevent or delay the full realization of the benefits of the Fiat-Chrysler Alliance,” the company said in the filing, and warned there could be a “material adverse effect on our business prospects, financial condition and results of operations” if the relationship deteriorated. The filing said that Fiat shares technology, vehicle designs, facilities, and managers with Chrysler, and would reconsider those arrangements.
“Fiat?is evaluating the various potential impacts that a public offering and the consequential introduction of public stockholders may have on its views of the Fiat-Chrysler Alliance” and is “considering whether or not to continue expanding” the relationship beyond its contractual obligations, the filing said.
Chrysler also acknowledged Fiat’s alternative proposal, to buy the rest of Chrysler or create a simplified single entity, and said that “completion of this offering will prevent or delay Fiat from meeting this objective.”
