Fiat Unlikely to Get Chrysler Stake at Low Price

A Delaware state judge says he is "leaning" toward the claim of a union-run retiree healthcare trust that its Chrysler Group LLC shares are worth considerably more than Fiat SpA is offering for them.

Last July Fiat proposed paying the trust $140 million for a 3.3% Chrysler stake. The trust rejected the offer, saying the shares are worth at least $342 million. Fiat currently owns 58.5% of the U.S. carmaker.

Resolving this dispute is crucial to Fiat's goal of buying the trust's entire 41.5% Chrysler stake by next year. Based on the valuations they are defending in court, the trust wants $4.8 billion for its holding and Chrysler contends the shares are worth $1.9 billion.

Each side claims its valuation is based on a formula from Fiat's agreement with the U.S. government in 2009 to take a 20% stake in bankrupt Chrysler. But the two parties disagree on how the formula is interpreted, including how the company's debt should be calculated and whether U.S. or international accounting standards should be used.

The judge says he may seek expert advice on such issues. He did not indicate when he might rule on the case.