Charles Rex Arbogast/AP Chrysler Group expects to set a price range for its initial public offering as early as this week to raise $1.5 billion to $2 billion, the Wall Street Journal reported, citing people familiar with the matter.
The U.S. automaker expects to complete the offering in the first half of December in an effort to beat the IPO market slowdown around the holidays, the Journal reported (subscription required).
Reuters reported last week that Chrysler had added four banks to help underwrite the IPO and that the automaker was looking to launch the deal as soon as early December.
Chrysler, which is majority owned by Italian automaker Fiat, filed paperwork to go public in late September after Fiat was unable to reach a buyout deal with Chrysler’s second-largest shareholder, a retiree health care trust affiliated with the United Auto Workers union.
Fiat, which owns 58.5 percent of Chrysler, wants to take full control and buy out the rest of the stock owned by the trust, a voluntary employee beneficiary association, but has balked at the more than $5 billion being demanded.
In response, the trust exercised a right enshrined in Chrysler’s 2009 government-financed bankruptcy to go forward with an initial public offering, stepping up pressure on Sergio Marchionne, chief executive of both automakers, to reach a deal.
The expected price range would imply a total value for Chrysler of between $9 billion and $12 billion, based on the 16.6 percent stake that the trust has demanded the company register for the IPO, the Journal said.
At the proposed IPO price, the trust’s stake will be valued at between $3.7 billion and $5 billion. It had valued its ownership stake in Chrysler at $3.6 billion at the end of 2012, according to a filing with the U.S. Department of Labor.
Chrysler and Fiat couldn’t immediately be reached for comment outside of regular U.S. business hours.