UAW Blasts Kerkorian-Iacocca Chrysler Bid; Dealer Groups Urge Rejection
DETROIT (AP) _ Chrysler Corp.’s national dealer councils are urging the company to reject billionaire Kirk Kerkorian’s takeover bid, saying a change in the automaker’s ownership would hurt their future business.
The United Auto Workers union also criticized the proposed deal Wednesday, describing it as ``a classic example of the `get-it-while-you-can’ mentality that wrecked so many American corporations in the 1980s.″
Meanwhile, Bear Stearns & Co., the investment bank expected to lead Kerkorian’s takeover effort, told Chrysler Chairman Robert Eaton it won’t be involved in the deal, The Detroit News reported in today’s editions. Last week, Chrysler sent Bear Stearns a letter objecting to its affiliation with Kerkorian.
Bear Stearns apparently wants to protect its lucrative business of underwriting Chrysler bond sales, the News said. It has earned more than $10.5 million managing nearly $4 billion in Chrysler bond sales since 1990.
Kerkorian, who owns 10 percent of Chrysler’s stock, proposed April 12 that he buy the rest for $55 a share, financing part of the $22.8 billion transaction with $5.5 billion from Chrysler’s cash reserves.
Kerkorian would put up his $2 billion worth of Chrysler stock and former Chrysler Chairman Lee Iacocca would invest his $50 million stake in the deal. To complete it, Kerkorian would find about $3 billion from other investors and borrow the rest.
The groups represent 4,700 Dodge, Jeep-Eagle and Chrysler-Plymouth dealers.