Buyout firm Blackstone May Bid for Chrysler

LONDON March 6, 2007; Reuters reported that private equity firm The Blackstone Group may bid for the troubled U.S. division of German automaker DaimlerChrysler AG, a person familiar with the situation said on Tuesday.

Blackstone has approached the automaker and been granted due diligence in preparation for a possible bid, said the source, adding there is no guarantee that the private equity firm will make an offer for Chrysler.

Other possible buyers include Cerberus Capital Management, the Detroit News, which first reported the Blackstone talks, said.

Blackstone declined to comment.

Two sources close to the sales process told Reuters last week that a detailed sales prospectus for Chrysler Group bidders should be completed soon, the first step toward a potential sale that would unwind the 1998 merger that created DaimlerChrysler.

Private equity firms were expected to be among the potential bidders for Chrysler that would consider the automaker's sale-related documents, the sources told Reuters.

Meanwhile, General Motors Corp. has held preliminary talks with DaimlerChrysler about an outright acquisition of Chrysler or some kind of alliance with the automaker, sources have previously told Reuters.

Other automakers -- including Germany's Volkswagen AG, Italy's Fiat SpA, affiliates Renault SA of France and Nissan Motor Co. Ltd. of Japan and South Korea's Hyundai Motor Co. Ltd., have said they are not interested in buying Chrysler.

PSA Peugeot Citroen has also ruled itself out. Chief Executive Christiaan Streiff said on Tuesday, "We don't have time to look at Chrysler, which isn't to say that such an operation would be stupid. But to launch this now would be such a distraction of effort that it isn't possible."

"I do not think we will conclude another industrial alliance," Streiff told reporters at the Geneva motor show.