URGENT AMC Board Approves Chrysler Buyout at $4.50 Per Share
DETROIT (AP) _ American Motors Corp.’s board of directors has approved an $830 million Chrysler Corp. buyout proposal that would give AMC shareholders $4.50 worth of Chrysler stock for each AMC share, the companies said Wednesday.
″The board of directors of American Motors has studied, evaluated and negotiated the Chrysler proposal and believes that the merger on these terms is in the best interests of the stockholders,″ AMC President Joseph Cappy said.
Chrysler’s initial $757 million proposal, announced March 9, would have exchanged $4 worth of Chrysler stock for each outstanding AMC share not owned by the French government-owned automaker Renault.
As part of the deal, Chrysler has agreed to buy Renault’s 46.1 percent interest in AMC for $35 million in cash and $200 million to be paid later at 9.75 percent interest, Chrysler spokesman John Guiniven said.
The deal must be approved by the boards of Chrysler and Renault, AMC shareholders and the French, U.S. and Canadian governments.
AMC’s annual meeting, which had been scheduled for April 29, was postponed last month until AMC’s board reached a decision on the Chrysler proposal. The meeting will be held in about 90 days after proxies have been mailed, AMC spokesman Edd Snyder said.
″We have said all along that we believe the combination of Chrysler and American Motors will be good for the stockholders, employees and dealers of both companies. We hope that final approvals can be obtained quickly,″ Chrysler Chairman Lee Iacocca said.
Chrysler, the nation’s third-largest automaker, will receive several benefits from its purchase of AMC, the nation’s fourth-largest maker.
AMC owns Jeep Corp., the best-known maker of sport-utility vehicles. AMC and Renault just built a high-tech auto assembly plant in Bramalea, Ontario, which will begin building a new sedan called the Premier in the fall.
In addition, Chrysler will have access to more than 1,000 AMC dealers.
Before the announcement, Chrysler Motors Chairman Gerald Greenwald and two Chrysler Motors vice presidents met Wednesday with AMC union officials from Toledo, Ohio, and Milwaukee and Kenosha, Wis., at the United Auto Workers headquarters in Detroit.
UAW spokesman Bob Barbee said the Chrysler officials answered some questions but, because Chrysler has not conducted studies of AMC’s four assembly plants, were not yet able to say whether any will be closed.