BERLIN -- Kirk Kerkorian, the Las Vegas billionaire with a history of shaking up the Detroit auto industry, is on the steps of DaimlerChrysler AG, offering $4.5 billion to take the struggling Auburn Hills, Mich.-based unit off the Germans' hands.
In a letter to DaimlerChrysler Chairman Dieter Zetsche and the company's supervisory board, made public yesterday, Kerkorian's Tracinda Corp. made a cash offer for the Chrysler Group. He also offered to place $100 million in escrow for a 60-day exclusive window to review the company's books before making the deal final. Tracinda said it was willing to forfeit $25 million if the transaction is not consummated.
"Tracinda believes its offer would permit DaimlerChrysler to dispose of Chrysler at an attractive price and enable DaimlerChrysler to focus on its other operations," the letter said. "Tracinda also believes that the experience, expertise and financial strength Tracinda and its team will bring to Chrysler will greatly benefit Chrysler and its employees, suppliers and customers."
News of the Tracinda offer sent DaimlerChrysler stock up 5.3 percent to close yesterday at $84.80, its highest price since 1999.
Kerkorian, 89, has been making waves in the auto industry for two decades. He bought up big chunks of then-Chrysler Corp. in the 1990s in an unsuccessful bid to take over the company.
After the union of Daimler-Benz AG and Chrysler in 1998, Kerkorian also unsuccessfully sued DaimlerChrysler saying the deal pitched as "merger of equals" was a one-sided takeover that cheated him out of a higher stock price.
Just last year, Kerkorian ended a brief but rocky stint as a major shareholder in General Motors Corp. He bought almost 10 percent of GM stock, encouraged the Detroit automaker to pursue an alliance with Nissan Motor Co. and Renault SA and then dumped his stock after the alliance talks fell through.
"This sounds like an ante in a poker game that Mr. Kerkorian wants to play in," said auto analyst Jim Sanfilippo, executive vice president and chief marketing officer at WPP Team Detroit. "This is a gentleman with a lot of money and a lot of options. ... I think he's got Zetsche's attention."
DaimlerChrysler spokesman Hartmut Schick declined to comment. The public offer comes on the heels of the DaimlerChrysler annual meeting in Berlin where numerous shareholders expressed dissatisfaction with the nearly nine-year-old merger between Daimler-Benz and Chrysler.
