TURIN -- Fiat CEO Sergio Marchionne said he is still a long way from reaching a deal to purchase the rest of Chrysler Group LLC from a retiree health-care trust.
The UAW trust, also known as VEBA, may instead try to sell part of its 41.5 percent holding through an initial public offering as soon as the fourth quarter, which would delay efforts to merge Fiat and Chrysler, Marchionne, who runs both automakers, told reporters today at an event in Turin. Fiat may buy the trust's holding at the market price, he said
The CEO, 61, said he's still talking to the trust to reach agreement. Fiat and the trust are also in a court dispute over the value of part of the holding which Fiat has options to buy.
Marchionne at the same time is preparing for a potential IPO of the U.S. automaker to comply with the UAW's trust's request, which it has the legal right to do.
The CEO's surprise decision not to attend the Frankfurt car show earlier this week prompted speculation that he was busy wrapping up the Chrysler buyout.
That was not the case, he said, looking relaxed and chatting with reporters.
"I had work to do," he said when asked why he cancelled a scheduled visit to the car show. In the meantime, talks continue, he said.
VEBA's goal is to obtain the highest possible payment it can for its stake, people familiar with the situation have said. That would be over $5 billion, according to terms of Chrysler's 2009 bankruptcy agreement.
"They should buy a lottery ticket," Marchionne said to reporters when asked to comment on the $5 billion figure.
The IPO could take place in the first quarter of 2014, Marchionne said on Friday. He had previously targeted the fourth quarter of this year.
From Bloomberg and Reuters reports