WILMINGTON, Del. --Kirk Kerkorian made more than $1 billion in just two days when news broke of Chrysler Corp.'s plan to merge with Daimler-Benz AG. So what's he complaining about?
That was the testimony from a merger and acquisitions expert on Wednesday in Kerkorian's lawsuit against DaimlerChrysler AG and its senior German officials.
Kerkorian is suing for more than $1 billion in damages, claiming that his 89 million shares of Chrysler stock were undervalued in the deal because the company falsely pitched the transaction as a "merger of equals."
As the trial concluded Wednesday, Daniel Fischel, a University of Chicago business professor and consultant, defended the merger, calculating that Daimler paid more than shareholders of other large mergers received.
Fischel, who also helped determine the compensation for victims of the Sept. 11 World Trade Center disaster, argued that the Daimler deal was not only fair, but unusually generous. He claimed that the 28 percent premium Daimler paid above Chrysler's May 1998 market value was nearly three times the average paid for stock in other large mergers -- and more than twice the average paid for stock and other transactions billed specifically as "mergers of equals."
How much Fischel's points will sway U.S. District Judge Joseph Farnan Jr. as he contemplates a ruling in the law suit remains to be seen.
Kerkorian's legal team has never denied that the billionaire Las Vegas investor made big money on the merger. In fact, DaimlerChrysler's lawyers have claimed that Kerkorian made close to $3 billion in profits as his Tracinda Corp. investment company sold off stock after the merger.
But Kerkorian's argument has been that he could have made even more money if Daimler had revealed what he calls its true intention of taking over Chrysler and replacing its U.S. management team with Daimler-Benz personnel.