Chrysler LBO resorts to desperate measures 25 Jul 2007 Cerberus and its banks bent over backwards to get the deal done. The buyout shop actually agreed to provide part of the debt. And its banks agreed to take the first hits if Chrysler defaults. But they may rue setting those precedents if the markets don t recover.
Allison’s pulled $3.1bn loan bodes ill for Chrysler 24 Jul 2007 The General Motors unit is profitable and its new private equity owners aren t pushing the envelope on debt multiples or borrowing terms. That s different from other stumbling LBO financings. And it makes lossmaking Chrysler s $20bn package look a lot trickier to pull off.
Ford should hand over the keys to Volvo 16 Jul 2007 Selling off the luxury brand might hurt a bit. It s mortgaged up, and is the most profitable premium brand in the US carmarker s garage. But Volvo is also the only brand a rival might pay up for. Given Ford s troubles in its mainstream business, the pain is probably worth it.
Harley Davidson has room to rev its engine 29 Jun 2007 Rumours of a Honda bid for Harley sputtered out quickly. But the iconic American motorcycle company's valuation looks attractive. A buyout might be hard to pull off, but Harley has plenty of other ways to accelerate value for shareholders.
GM’s $5.6bn disposal highlights long road ahead 28 Jun 2007 Detroit s top dog snagged a good price for its transmission unit. That s worth a pat on the back, and the cash will come in handy. But the sale also shows how far the turnaround has to go. Allison accounts for just over 1% of GM s revenue, but over a quarter of earnings.
Ford won’t get luxury prices for Jaguar/Land Rover 12 Jun 2007 But shareholders shouldn t hold out much hope. Neither is very valuable. And the assets have already been hocked to raise money. The carmaker may sell the two British iconic brands. This makes sense given their performance and capacity to distract management.
Tata’s $2500 car threatens carbon targets 5 Jun 2007 The price of the first model, coming in 2008, is set to be 40% lower than its nearest rival. It s good news for emerging market consumers. But if the vehicle catches on, the production of carbonspewing cars will accelerate. Development doesn t fit will with emission controls.
BMW bid for Volvo would be a tough sell 29 May 2007 Current owner Ford s already borrowed against its Swedish unit, and would have to use at least half any sale proceeds to pay down its debts. True, BMW could overcome that by offering a juicy premium. But doing so would only drag down the German car maker s margins.
Magna doubles up on oligarchs 10 May 2007 The Canadian partsmaker already had an imperious boss in the form of Frank Stronach, whose disregard for shareholders is legendary. Now he s sharing power with Russian aluminiumwar veteran Deripaska, who is investing $1.54bn to finance further empirebuilding.
West LB still looks like a lost institution 13 Apr 2007 The German bank is prosecuting two former traders over a Porsche deal that went wrong. And now it finds itself with 14% of Daimler. It s been almost two years since the state guarantee went away. But WestLB hasn t lost its public sector owners or found a clear strategy.
China will force world car glut by 2010 12 Apr 2007 According to a JD Power study, the country will overtake Japan in 2010, building 11m automobiles. Chinese domestic models are building capacity and gaining share. They will be formidable worldwide competitors.
Chrysler shouldn’t go exclusive with Kerkorian 5 Apr 2007 Daimler boss Dr. Z is under pressure to get Chrysler off his books. But he needs to get shareholders the best price possible. There s more chance of achieving that if all the interested bidders can get a look at the books. But Tracinda has set a floor.
Who’s behind VW’s pref share mystery? 30 Mar 2007 Someone has been snapping up VW's nonvoting stock in the past 6 weeks. One theory is that the buyer was Porsche, or someone close to it. That may not seem to make much sense, as Porsche is interested in votes. But preference shares don't have to remain voteless for ever.
Porsche creeps to control at VW with deep-discount bid 26 Mar 2007 The carmaker s aim has always been to maximise its influence at VW for minimum capital. That s what this bid is designed to do. Should it fail, as intended, Porsche will then be free to creep to control of VW without the need to buy all the shares.
Valeo fast sailing to proxy fight 22 Mar 2007 Apollo is considering a bid for the French carparts company while two activist shareholders want to pull it in opposite directions. As most of the board is up for renewal, management should clearly articulate its vision on how to maximise value. Before it s too late.
Ford sells Aston Martin for less than premium price 12 Mar 2007 The $925m tag values the car brand at just one times sales much less than rivals Porsche and Ferrari. And the exparent has kept a stake. That may reflect the uncertainties surrounding luxury car manufacturing in a world of tightening environmental standards.
Magna bid for Chrysler wouldn’t make sense 9 Mar 2007 The Canadian car parts maker could alienate Ford and General Motors if it buys its largest customer. That s too big a risk by itself. What s more, Magna s founderboss Frank Stronach has never been keen on debt or unions. Buying Chrysler would give him both in spades.
Is private equity a possible Chrysler saviour? 26 Feb 2007 Perhaps. But that might not suit Daimler best. It might have to pay an LBO buyer as much as $8bn to take the ailing US unit off its hands. A better option would be to forge an alliance with a rival like General Motors. It s the most likely way to salvage some value.
A GM-Chrysler deal makes sense on paper 16 Feb 2007 Imagine a deal whereby Daimler injects Chrysler into GM for an equity stake and the three of them fashion a NissanRenault type alliance. That looks easy. The challenge would be shuttering much of the merged GMChrysler and their overlapping brands. But it s not impossible.
Italian regulator takes Agnelli clan to task 14 Feb 2007 Italy's laidback stock market watchdog has woken up and suspended three Ifil executives for misleading the market over Fiat share dealings. True, it looks a pretty open and shut case. But it's progress that the regulator is willing to apply its own rules with some vigour.