Cerberus won't split Chrysler up, wants single buyer

Talk of General Motors purchasing or merging with Chrysler, sale to a third party or other speculation has been refined somewhat by Cerberus' statement today that it is trying to find a single buyer for Chrysler. The ideal situation for Cerberus would be a merger with GM, stake in the combined company and more of an interest in the GMAC financing company currently split between Cerberus and GM, according to the latest reports.

By not considering a split-up of the company across several buyers, Cerberus can leverage the full value of the Chrysler brand - whatever that may be - in its negotiations, as it owns an 81% interest in the company. Daimler, of the former DaimlerChrysler merged company, owns the remaining 19%. By keeping its stake in a single block, Cerberus may be able to command a better price, as opposed to breaking it into smaller, less valuable chunks. That's why Chrysler is reportedly less enthusiastic about a possible deal with Renault-Nissan, which is believed to be seeking a minority interest in Chrysler, reports the Detroit Free Press.

GM currently owns 49% of GMAC to Cerberus' 51%, so ceding some more shares to Cerberus wouldn't cause a significant shift in power unless it would give Cerberus a super majority. Even so, GM doesn't appear to be especially keen on retaining its GMAC stake.

While all of this is going on, however, Chrysler's President Jim Press has been spinning off the sale talk as little more than speculation. Press insists Chrysler will still "be here", reports The Detroit News, implying the brand would remain active and extant for the foreseeable future. Nevertheless, reports of ongoing talks with General Motors and Renault-Nissan can't be so easily discounted. Whatever the result of the talks, Press seems convinced that the brand will be unaffected.

"The best thing we can do is focus on our business at hand and try to match and beat the competitors," Press said.