Bank Advisors Value Chrysler at $10 Billion

Investment bankers working on a possible initial public offering for Chrysler Group LLC estimate the company s value at about $10 billion, Bloomberg News reports.

At that price, the 41.5% stake in the company held by a United Auto Workers union trust fund would be worth less than $4.2 billion. That price is roughly midway between $3 billion Fiat SpA reportedly offered for the stake earlier this year and the $5 billion value estimated by the trust five weeks ago.

Fiat, which owns 58.5% of Chrysler, is eager to buy out the trust and avoid a public sale. But the two sides have been mired in a court battle over price that is unlikely to be resolved until late next year.

Bloomberg notes that investment banks have considered a value range for Chrysler from $9 billion to $16 billion, and that such discussions continue. Unnamed sources tell Bloomberg that Fiat is ready to begin formal IPO discussions with the union in two weeks if a value range is set and made public.

Analysts note that Fiat could still avoid the IPO by offering a premium above the price ultimately set for the offering.