DaimlerChrysler shares gained sharply on Friday on speculation that the German automaker could be nearing a deal to sell struggling U.S. unit Chrysler.
Sources familiar with the sales process have told Reuters that DaimlerChrysler is looking to get initial indications of bids for Chrysler by the end of the month, just ahead of Daimler's annual meeting in Berlin.
However, the powerful German trade union IG Metall is opposed to DaimlerChrysler selling its Chrysler business to a private equity buyer, a regional union leader told a German newspaper.
"We don't have any interest in seeing Chrysler sold to a locust," Joerg Hofmann, the head of union IG Metall in the German state of Baden-Wuerttemberg, told the Berliner Zeitung. "There should be a solution for our colleagues in the U.S. which benefits the Chrysler brand," Hofmann said. "A purely financial investment with the aim of making a quick buck doesn't do much in this respect."
The term locust refers to a comment about foreign investors made by a key German politician in 2005.
Private equity firms Cerberus, Blackstone Group and Magna International have emerged as the leading candidates to buy Chrysler, now the fourth-biggest U.S. carmaker, people familiar with the matter have told Reuters.
On Friday, an analyst said auto parts supplier Magna had joined with a private equity partner to offer to buy Chrysler for between $4.6 billion and $4.7 billion.
KeyBanc Capital Markets analyst Brett Hoselton cited unnamed "sources" as saying that Magna was looking to take up to a 25% stake in Chrysler under the terms of the proposed deal.
Hoselton said in a note for clients that the bid had been made to Chrysler parent DaimlerChrysler of Germany in the form of a "joint letter of interest." He did not name the private equity firm partnered with Magna.
Hoselton said other leading contenders to buy Chrysler had valued the automaker at between $5 billion and $6 billion.