Bear Sterns pulls out of Chrysler bid
Friday 21 April 1995
Bear Stearns took the surprise decision after receiving a letter from Chrysler pressuring the bank not to assist in Mr Kerkorian's $22bn bid. The car maker has meanwhile embarked on a parallel campaign to dissuade the commercial banks from helping raise finance for the proposed takeover.
Though Bear Stearns had not formally been engaged by Tracinda, Mr Kerkorian's Las Vegas-based investment company, the bank had stated publicly that it had been selected to help shepherd the hostile bid. Its withdrawal leaves Tracinda without any Wall Street adviser.
"No one else as far as we know has stepped up to the plate," Joseph Philippi, a car industry analyst at Lehman Brothers, said. He also noted that Chrysler shares have been slipping in recent days as the credibility of Mr Kerkorian's $55-a-share offer has appeared to erode.
Other investment banks that have a track record with Mr Kerkorian include Merrill Lynch and Salomon Brothers. Analysts thought it unlikely that Merrill would want to get involved while Salomon is already helping Chrysler plot its defence.
Mr Kerkorian, who has teamed up for the bid with Lee Iacocca, the former Chrysler chairman, may face more serious difficulties, meanwhile, in raising financing, particularly with Chrysler arm-twisting the banks. His proposed takeover would require up to $12bn in new loans, together with $3bn from outside investors. The rest would come from Chrysler's own cash and from Mr Kerkorian and Mr Iacocca themselves.
Many big banks have relationships with Chrysler they would be loath to jeopardise by helping Mr Kerkorian. They include Chemical Bank, Chrysler's lead bank, JP Morgan and Chase Manhattan. One bank that conspicuously does not have ties with Chrysler is Citicorp.
And while Tracinda will now have to search for a new investment bank, Chrysler has lined up three of Wall Street's main players: Salomon, Morgan Stanley and, principally, CS First Boston.
- 1 Frank Lampard's face drops when Holly Willoughby introduces him as a 'Man City legend'
- 2 Sofyen Belamouadden murder: The inside story of a crime that horrified Britain
- 3 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 4 The Visit: Trailer for M Night Shyamalan's latest horror film is terrifying
- 5 9/11: Iranian General accuses US of organising September 11 terror attacks
General Election 2015: Tories sack candidate who said she would never support 'the Jew' Ed Miliband
9/11: Iranian General accuses US of organising September 11 terror attacks
General Election 2015: Stephen Hawking says he will vote Labour
Manny Pacquiao begs Indonesia president to spare life of drug smuggler Mary Jane Veloso about to be executed
Yazidi sex slaves undergoing surgery to 'restore virginity' after being raped by Isis militants
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Aaron and Melissa Klein: Oregon anti-gay bakers ordered to pay $135,000 after refusing to make cake for same-sex wedding
Andrew Lloyd Webber: Phantom of the Opera writer mocked after issuing a warning about Ed Miliband and Nicola Sturgeon
General election 2015: Labour will toughen hate crimes legislation surrounding Islamophobia
HSBC review into moving headquarters from UK 'underway'
iJobs Money & Business
£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...
£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...
£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...
£45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...