Daimler and Cerberus Prepare For Battle
The latest skirmish is ostensibly over the price tag to be placed on Daimler’s remaining ownership share of Chrysler, but what we are really seeing are early salvos in the “you ripped us off” lawsuit Cerberus is destined to file against Daimler. Daimler put out a terse press release this morning saying: “The negotiations between Daimler AG and Cerberus Capital Management LLC on the redemption of Daimler’s 19.9% shareholding in Chrysler Holding LLC (“Chrysler”) and other issues related to Cerberus’s investment in Chrysler have been made considerably more difficult during the last weeks due to exaggerated demands by Cerberus. These demands by Cerberus exceed the value of Cerberus’ investment in Chrysler. For the acquisition of an 80.1% stake in Chrysler, Cerberus had invested USD 7.2 bn. The claims made now go beyond the framework of the contractually agreed possible obligations under representations and warranties. The new claims also include an allegation of conduct outside the ordinary course of business by Daimler during the time between signing and closing of the transaction as well as the allegation of incomplete information about the business. Daimler rejects these absurd allegations and the claims derived there from as being completely without substance.”
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"Since Daimler already considers the value of their share in Chrysler to be worthless, just give it to Cerberus for free." Ah, but Cerberus appears to want more than that. They want Daimler to put more cash on the barrel AND give up the remaining shareholdings. "We waz wobbed" they say.
Wasp landing on thistle. Someone's going to get stung, and it's going to be fun to watch.