Kirk Kerkorian Bids For Chrysler!

This is getting exciting! Kirk Kerkorian’s investment company, Tracinda, made a $4.5 billion cash bid for the Chrysler Group today, according to reports. This comes fast on the heals of three other headline making Chrysler stories:

• that Daimler-Chrysler’s big German boss, CEO Dieter Zetsche, confirmed the Chrylser group was for sale,
• that bids had been submitted by Blackstone, Cerebrus and Canadaian automanufacturer Magna International,
• and that JP Morgan was putting the deal on a fast track, reviewing the bids beginning this week and hoped to have selected a winner by month’s end.

Well, you can wipe those off the whiteboards, kids, because the headline is going to Kerkorian’s bid. Not only is it a cash deal, he’s also got the backing of both the United Auto Workers and Chrysler senior management.

Prior to this announcement it was widely rumored that Magna might have the strongest bid, since it was thought to be the most likely bidder to keep the Chrysler relatively intact and gain the cooperation of unions. But Kerkorian’s offer now seems the front-runner. In fact, it seems so strong that it might entirely change the game.

“You can bet the boys down at Blackstone and Cerebus are cancelling their Easter weekend plans,” a source who consults for many private equity groups told DealBreaker. “Time to rewrite the bids.”

Kerkorian has a long, storied history with Chrysler. In the mid-nineties he attempted to takeover the company in an alliance with Lee Iacocca. He remained one of the largest single shareholders in the car company until it merger with Daimler-Benz in 1998. At the time—and to this day—many saw Kerkorian’s handiwork behind the deal.

In the nineties Kerkorian was often represented as a “corporate raider” and many feared he wanted to own Chrysler only to destroy it, or at least disassemble the company and slice of its less profitable divisions and product lines. These days many fear that the private equity bidders have similar plans, and Kerkorian seems to be promising to keep the company intact.

“Can KirkKerk actually be the white knight he always claims he is and save Chrysler from the ‘merger of equals’ he initially drove them to? Stay tuned for the next episode of Crazy Chrysler!” Jalopnik editor Ray Wert told DealBreaker. (Note: Ray uses phrases like “he initially drove them to” but this isn’t his fault. It is a well-known condition that car pundits cannot resist automotive puns.)

"It's like the late 90's all over again, only in reverse," Ray added. (Note: Reverse. See what we mean?)

Kerkorian Offers $4.5 Billion for Chrysler [New York Times]
Tracinda's Letters to Chrysler [pdf via New York Times]
The Official Car Pundit Drinking Game: Is The UAW In Bed With Kirk Kerkorian? [Jalopnik]
Chrysler sale looks certain [Detroit News]

Update: The lads at Deal Journal are outdoing themselves translating the letters from Tracinda speak into a normal human language.
A sample:

The returns will not come quickly. Investors that feel the need to show “mark to market” results in their funds in relatively short time frames (just a few years) will not be willing to invest as necessary over an unusually lengthy period of time to achieve the necessary end results.
Dr. Z., why are you imperiling the future of Chrysler by playing footsie with the fast-money crowd from New York? I don’t have to live by the same rules and can be a better steward than the folks, like Cerberus, who’ve chosen the hound of Hell as their name and mascot.