Onex, Magna eye bid for Chrysler

Onex, Magna eye bid for Chrysler
Schwartz, Stronach preparing all-Canadian offer for car maker

BOYD ERMAN AND GREG KEENAN

From Wednesday's Globe and Mail

Two of Canada's most aggressive and successful businessmen, Gerald
Schwartz of Onex Corp. and Frank Stronach of Magna International Inc.,
are working on a joint bid for all of money-losing auto maker Chrysler,
according to people familiar with the sale process.

The rationale behind a Magna-Onex partnership is that Magna could bring
its expertise to operating auto factories, while Onex could use its
financial finesse to run Chrysler's credit arm, the sources said.

Onex could also bring a labour-friendly private equity face to the table
‹ many unionized workers made big gains in the company's recent purchase
of an aerospace company ‹ in a negotiation where making a deal with
unions to cut costs will be key.

The price that Magna and Onex would pay is unclear, according to the
sources, who requested that their names not be used, though there have
been suggestions that seller DaimlerChrysler AG wants to generate at
least $8-billion (U.S.) from a sale. Any buyer would also have to find a
way to deal with the massive pension and health liabilities that
Chrysler will come with, estimated at more than $15-billion.

Chrysler posted an operating loss of $1.5-billion last year after being
sideswiped by a sudden and rapid rise in the price of gasoline, which
sent sales of the company's pickup trucks and sport utility vehicles
skidding.

The only offer that has been made public so far is a $4.5-billion cash
offer from billionaire Kirk Kerkorian.

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