On Friday, Sergio Marchionne, who heads Fiat and Chrysler, told reporters in Milan, Italy that he hasn’t gotten any closer to making a deal with the UAW’s retiree health care trust for Fiat to purchase the VEBA’s shares in Chrysler and take full ownership of the Auburn Hills automaker. The UAW health care trust owns 41.5% of Chrysler and the two parties have not been able to agree on a price. The trust is demanding $5 billion for its shares. Marchionne told the LaPresse news agency, concerning the UAW trust’s suggested price, “They should buy a lottery ticket.”
Marchionne said that though an initial public offering of Chrysler stock could delay a merger with Fiat, his team was preparing for such an IPO in order to comply with a request from the VEBA, which has the legal right to ask for an IPO. The filings with the U.S. Securities and Exchange Commission will be ready by the end of the month. Marchionne said that an IPO for Chrysler could be ready by the end of the year but that he thought that financial markets would be more receptive in the first quarter of 2014.
The Fiat CEO would rather buy the trust’s shares in a block rather than have to buy them back piecemeal from the public should the trust sell them on the open market.
After a July court ruling siding with Fiat over the VEBA concerning the price of a smaller tranche of Chrysler shares, the two sides have failed to agree on a price for the trust’s remaining stake.