Given Chrysler Group LLC's colorful history, the initial public offering it filed Monday might seem like just another wacky chapter.
But the circumstances surrounding the IPO have attracted the attention of Wall Street and Main Street because the IPO was forced by the failure of the auto maker's Italian majority owner and its main union to agree on the company's value, according to Christina Rogers in the Wall Street Journal.
"Fiat SpA, which owns 58.5% of Chrysler, doesn't want a share sale and is eager to own the company outright. But the United Auto Workers union health trust, holder of a 41.5% stake in the No. 3 Detroit auto maker, has demanded that its shares be offered to the public after negotiations to sell them to Fiat stalled.
"In its Monday filing, Chrysler warned that if Fiat can't get control, the Italian auto maker could turn its back on Chrysler, unwinding a deal that was a centerpiece of the Obama administration's 2009 auto industry rescue."
Some key points, according to Rogers:
* Analysts and others familiar with the situation say Fiat will likely now redouble efforts to reach a private deal with the UAW.
* On Tuesday, Fiat said the regulatory filing is no guarantee that the sale of Chrysler stock will take place.
* Fiat Chief Executive Sergio Marchionne, who also leads Chrysler, wants to own Chrysler outright and merge the two companies into a single auto maker. Mr. Marchionne has said a public offering could come in the first quarter of 2014, but that he wants to avoid one by buying out the union trust's holdings in a private deal. A deal between Fiat and the UAW trust could still take place before any shares are sold.
* Mr. Marchionne, as Chrysler CEO, is in the awkward situation of having to meet with investors and persuade them to pay top dollar for shares that as Fiat's CEO he would prefer to buy on the cheap.
