Negotiations on redemption of Chrysler shares more difficult
Muamer Hodzic December 1, 2008
Welcome back ladies and gentlemen, we hope you had a great thanksgiving weekend. I am sure we all had enough rest for now, which means it is back to work. To kick things off, we’ll start with a somewhat unpleasant story between Daimler and Cerberus.
The negotiations between Daimler AG and Cerberus Capital Management LLC on the redemption of Daimler’s 19.9% shareholding in 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.
We hope with will be settled soon, so that we can put this chapter of history behind us; we’d actually rather burn it, but what can you do.
