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NEW YORK/LONDON: US carmaker Chrysler has asked banks to pitch next month for a mandate to run a potential public listing of its shares, four people familiar with the matter said, as parent Fiat wrangles with minority shareholder VEBA over a possible buyout.
Chrysler will interview investment banks in April for a underwriting role in a proposed initial public offering (IPO), the people familiar with the matter said.
Three of the people said bankers had been asked to prepare a “dual-track” sale leading either to the flotation of Chrysler shares owned by a United Auto Workers union retiree healthcare trust, VEBA, or an agreed buyout of its stake by Fiat.
Fiat owns 58.5 percent of Chrysler, while the other 41.5 percent is owned by VEBA.
A Chrysler Group spokesman said he had not heard of an April meeting of bankers for an IPO. Fiat declined to comment.
Fiat’s shares rose one percent on Thursday, closing at ¤4.194, outperforming the Milan stock exchange which rose 0.3 percent.
Sergio Marchionne, chief executive of both Fiat and Chrysler, has long wanted to merge the two automakers but has said he would be open to an IPO if Fiat and VEBA could not reach a deal.
Fiat has options to buy blocks of shares from VEBA, but its attempts to exercise them has been contested in court over their valuation. An IPO pitching process could provide a way of independently valuing the company and settling the argument.
Fiat has no intention of reducing its ownership, said the sources, who asked not to be identified because the discussions are private. Marchionne said earlier this week that he expected to reach a deal with VEBA and avert a public listing.
Talks are also starting on how Fiat would finance any future takeover of Chrysler, the people familiar with the matter said.