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James Hunt
10-16-2013, 08:27 AM
http://www.thetruthaboutcars.com/2013/10/trial-to-set-price-fiat-will-pay-veba-for-chrysler-shares-scheduled-for-sept-2014/

Fiat will have almost a year to negotiate a price for the 41.5% of Chrysler that is owned by the UAW employee health benefits trust. Thatís because the Delaware Court of Chancery set a date in September of 2014 for the lawsuit Fiat has filed against the trust, known as VEBA, to determine the sale price.





Judge Donald Parsons split the difference between the UAWís preferred date of January 2015 and the May trial that Fiat requested. Fiat even offered to fly executives from Italy for depositions to speed the process. After the scheduled five day trial closes, the judge will likely issue his ruling within 90 days.

The UAWís trust became Chryslerís second largest shareholder in exchange for foregoing future health care payments. The VEBA now wants to cash out to fund the health benefits. Fiat CEO Sergio Marchionne is also interested in cash, the cash Chrysler is generating. Fiatís sales are concentrated in Europe, where the car market continues to be weak and Marchionne needs access to Chryslerís cash. Some analysts say that without Chryslerís money, Fiat has no future.

The trial will have jurisdiction over the first of five call options that would allow Fiat to acquire 16.6 percent of Chrysler over time. In total, the difference between the two sides could amount to more than $1 billion. Earlier, Fiat valued a 54,000 share tranche of stock at $139.7 million while the trust put the value of those shares at $343.1 million.

It is assumed that if Fiat and the VEBA do not arrive at an agreed upon price by the start of trial, Judge Parsons ruling will likely establish a price for the remaining 25% of Chrysler stock whose value will not be adjudicated in the trial.

Robert Nixon
10-16-2013, 08:55 AM
I guess it's not doom and gloom as far as I know, since the two sides are still arguing over share prices, so now they have a timetable to resolve it. FIAT still has the option to buy the shares or not, so both sides kind of need the other to go ahead with the sale.

500ways
10-16-2013, 09:45 AM
This^^^^^ + to add, Marchionne is no dummy. Remember, he was the one that pushed GM for the billion dollars or so a few years ago. He knew how to get his way into Chrysler and he is playing a lot cleaner than Daimler Benz ever did. He's pretty shrewd, has a good poker face and both sides need each other.

VEBA better not get too greedy, because, as they say, if you pull the rope too hard, it may snap...

James Hunt
10-16-2013, 10:30 AM
Fiat CEO Sergio Marchionne is also interested in cash, the cash Chrysler is generating. Fiat’s sales are concentrated in Europe, where the car market continues to be weak and Marchionne needs access to Chrysler’s cash. Some analysts say that without Chrysler’s money, Fiat has no future.

Fiat’s implosion is what will become the death knell for Chrysler. “Some analysts say that without Chrysler’s money, Fiat has no future.” I take that to mean, from Fiat’s perspective, “We have ruined one car company, let’s bleed off Chrysler’s cash and kill another.”

At least Daimler AG and Cerberus are still in business; Fiat appears to be approaching, if not yet knocking, on death’s door.

Fiat500USA
10-16-2013, 11:01 AM
Fiat CEO Sergio Marchionne is also interested in cash, the cash Chrysler is generating. Fiat’s sales are concentrated in Europe, where the car market continues to be weak and Marchionne needs access to Chrysler’s cash. Some analysts say that without Chrysler’s money, Fiat has no future.

Fiat’s implosion is what will become the death knell for Chrysler. “Some analysts say that without Chrysler’s money, Fiat has no future.” I take that to mean, from Fiat’s perspective, “We have ruined one car company, let’s bleed off Chrysler’s cash and kill another.”

At least Daimler AG and Cerberus are still in business; Fiat appears to be approaching, if not yet knocking, on death’s door.

Not with you on this one. Marchionne did a miraculous turnaround with Fiat since he came onboard and if it weren't for the economic disaster just while things were happening this would be a very different story. Still, both companies are alive due to his foresight. If he can get Italian labor to get onboard, and the economy picks up, they'll be back. As far as Fiat having access to Chrysler's money, they wouldn't have any money without Fiat. Fiat traded 9-10 billion dollars in technology and management so as far as I am concerned the money is Fiat's.

500ways
10-16-2013, 01:28 PM
Fiat CEO Sergio Marchionne is also interested in cash, the cash Chrysler is generating. Fiat’s sales are concentrated in Europe, where the car market continues to be weak and Marchionne needs access to Chrysler’s cash. Some analysts say that without Chrysler’s money, Fiat has no future.

Fiat’s implosion is what will become the death knell for Chrysler. “Some analysts say that without Chrysler’s money, Fiat has no future.” I take that to mean, from Fiat’s perspective, “We have ruined one car company, let’s bleed off Chrysler’s cash and kill another.”

At least Daimler AG and Cerberus are still in business; Fiat appears to be approaching, if not yet knocking, on death’s door.

Let's agree to disagree...