Failure Might Mean UAW More Amenable to Fiat Offer.
Fiat said there will not be a formal float of shares in Chrysler this year, and it is more likely to take place in the first quarter of next year.
So that means Fiat’s attempt to buy all of Chrysler’s shares has been delayed until well into the New Year, right?
Maybe not. The negotiations between Fiat and the UAW’s VEBA (voluntary employees benefit association) appear to have run out of road, but the delay could ironically mean that the two sides are closer to an agreement.
The UAW VEBA has been holding out for more money from Fiat for its 41.5 per cent stake in Chrysler. Because the two sides failed to agree on a price, the UAW started the share sale as a device to force Fiat to pay more. The thinking was that when Fiat saw that the market valued Chrysler’s shares much higher than it did, the Italians would raise their offer before the courts forced an even higher price.
“The delay may provide an opportunity: It is still in Fiat’s interest to strike a deal before a float,” said the Wall Street Journal’s Heard on the Street column.
The UAW reportedly values its stake at $5 billion. Fiat is said to have offered $3.18 billion.
Fiat-Chrysler together rank as the world’s seventh-largest carmaker.