Marchione playing both ends against the middle deal he wants a merger between FiAT and Chrysler but he wants the UNION owners of stkc (VEBA) to acquiese and give him their shares cheap...(less then 6 Billion) That is why he is drawing up IPO plans... not Merger plans.. He needs to find out what the market will value the VEBA shares at.. It may be well north of 6Billion it may be 8 Billion.. If he has an IPO maybe the market will underwrite the cost of buying VEBA out..
How does CNHI figure into all of this? Are they considered a tracking stock like the Chrysler IPO will be? Both will be majority owned by Fiat but run as separate companies? or do I have this wrong?
Second, If VEBA drives a hard bargain and Fiat has to buy them out on the expensive side, does this knock down Fiaty shares, and or increase the value of Chrysler ex. Fiat?
Third, how does FIAT come up with the dough to buy out VEBA, would they consider an outright sale of CNHI?
All of this is very confusing.
First - CNH doesn't figure into it at all, it was merged with Fiat Industrial which is a different entity from FIATY (automotive).
Second- Market perception will be interesting and dependent on the price negotiated. Market discount also includes the time horizon, a more expensive deal done now is still a positive as Fiat can access the Chrysler cash flow. I'm not sure I understand your question, it would increase the valuation of Chrysler which will get folded completely into FIATY anyway, then hopefully we trade at industry multiples of global brands aka GM or F
Third- see number one