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Kerkorians Weird Bid For Chrysler

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by Felix Salmon
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Apr 05 2007 12:00am EDT

Kerkorian's weird bid for Chrysler

Kirk Kerkorian has gone public with a low-ball, $4.5 billion bid for Chrysler. He knows the company well: he had a 10% stake in 1995, when he tried to buy it for $20 billion, and held onto that stake until Chrysler was eventually sold to Daimler for $36 billion. So he's already made $3 billion from Chrysler, and now he's coming back for more.

But why would DaimlerChrysler accept such a low bid, when all the chatter values Chrysler at closer to $8 billion? Kerkorian tugs at the heartstrings in his letter. He tries to paint himself as the "right" ownership, which will "build Chrysler into a robust and lasting, stand-alone entity," and who will make "the necessary investments" in R&D and manufacturing.

All of which might be true. But DaimlerChrysler CEO Deiter Zetsche's foremost obligation is to his shareholders, and he is going to have a devil of a time explaining why it's leaving billions of dollars on the table just because Kirk Kerkorian is a nice guy.

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