06 April 2007

Chrysler, Exclusivity, and an Auction

Kirk Kerkorian has put a bid on the table. He wants to buy Chrysler from Daimler-Chrysler, for $4.5 billion. There are lots of conditions attached to that, and the most likely deal-breaker of the bunch is that he wants a two month period during which he and his investment company, Tracinda Corp., will have the exclusive right to examine Chrysler's books.

Two month exclusivity? Daimler doesn't want to 'go steady' yet. Daimler wants to flirt with a number of prospects. Or, in less romantic language: Daimler wants an auction. Other bidders or potential bidders are likely to find their interest piqued by the very public interest Kerkorian has expressed, and Daimler is best off letting them all stand on a level floor for now, which means denying KK his exclusive access.

By the way, one of those other bidders is: Cerberus. More confirmation for my quasi-conspiracy theory of Cerberus, which is simply: that hell-hound is everywhere.

Meanwhile, over at Deal Journal, Dennis Burnham is having some fun translating Kerkorian speak into English. He's posted a two-part series on this, here's the URL for the first of those parts.


And, if you don't want to read through it but would like a bit of the flavor, you're at the right place already. KK -- trying to boost his own cred, wrote, "Tracinda has been the controlling shareholder of MGM Mirage (originally MGM Grand) for twenty years–having built it into a public company with a market capitalization of nearly $21 billion today." Burnham translates: "Dr. Z, do you like craps? I can hook you up at a nice table."

Yuck yuck.

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Knowledge is warranted belief -- it is the body of belief that we build up because, while living in this world, we've developed good reasons for believing it. What we know, then, is what works -- and it is, necessarily, what has worked for us, each of us individually, as a first approximation. For my other blog, on the struggles for control in the corporate suites, see www.proxypartisans.blogspot.com.