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Chrysler won't be auctioned, Zetsche says

From Reuters| March 08,2007

DaimlerChrysler AG will not auction off the Chrysler group and could decide to keep the business at the end of a strategic review, CEO Dieter Zetsche told a German paper.

The possible divestment of Chrysler "will not take the form of an auction process," Zetsche was quoted as telling German paper Die Welt at the Geneva auto show in a story published today.

Two sources familiar with the situation told Reuters last month that information on Chrysler would be offered selectively to potential buyers so that DaimlerChrysler avoids an outright auction in favor of a more flexible sale process.

This left open the prospect that no bid might be strong enough to complete a deal, both sources said.

DaimlerChrysler announced last month it was examining all its options for Chrysler, whose reliance on pickups and SUVs pushed it to a loss last year amid high fuel prices.

"All options include the option of (maintaining) the status quo," Zetsche was quoted as saying in the newspaper.

A company spokesman confirmed the comments.

Private equity companies are closing in on Chrysler while rival carmakers in Geneva played down interest in the business.

U.S.-based buyout firm the Blackstone Group has approached Chrysler and been granted access to its books in preparation for a possible bid, a person familiar with the situation told Reuters on Tuesday, March 6.

The Detroit News reported that representatives from Cerberus Capital Management, another buyout firm, had met executives from Chrysler on Monday, March 5, to consider a possible bid for the struggling automaker.

General Motors CEO Rick Wagoner declined to comment in Geneva on whether the world's largest automaker was considering a bid for Chrysler.

GM has held preliminary talks with DaimlerChrysler about an acquisition of Chrysler or some kind of alliance with it, sources previously told Reuters.

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