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post #1 of 2 (permalink) Old 11-26-2008, 08:33 AM Thread Starter
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Negotiation Update

November 26, 2008

The negotiations between Daimler AG (stock exchange abbreviation DAI) and
Cerberus Capital Management LLC on the redemption of Daimler’s 19.9%
shareholding in Chrysler Holding LLC (“Chrysler”) and other issues related
to Cerberus’s investment in Chrysler have been made considerably more
difficult during the last weeks due to exaggerated demands by Cerberus.

These demands by Cerberus exceed the value of Cerberus’ investment in
Chrysler. For the acquisition of an 80.1% stake in Chrysler, Cerberus had
invested USD 7.2 bn.

The claims made now go beyond the framework of the contractually agreed
possible obligations under representations and warranties. The new claims
also include an allegation of conduct outside the ordinary course of
business by Daimler during the time between signing and closing of the
transaction as well as the allegation of incomplete information about the
business. Daimler rejects these absurd allegations and the claims derived
therefrom as being completely without substance.

This document contains forward-looking statements that reflect our current
views about future events. The words “anticipate,” “assume,” “believe,”
“estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should” and
similar expressions are used to identify forward-looking statements. These
statements are subject to many risks and uncertainties, including an
economic downturn or slow economic growth of the global economy, especially
in industrialized countries; the effects of the financial crisis which
could result in weaker demand for our products particularly in the U.S. and
in the European market but also in the emerging markets; changes in
currency exchange rates and interest rates; increasing risks of inflation;
the introduction of competing products and the possible lack of acceptance
of our products or services; price increases for fuel, raw materials and
precious metals; the disruption of production due to shortages of
materials, labor strikes or supplier insolvencies; a decline in resale
prices of used vehicles; the business outlook for Daimler Trucks, which may
be affected if the U.S. and Japanese commercial-vehicle markets experience
a sustained weakness in demand for a longer period than expected; the
business outlook of Chrysler, in which we hold an equity interest,
including its ability to successfully implement its restructuring plans;
the business outlook of EADS, in which we hold an equity interest,
including the financial effects of delays in and potentially lower volumes
of future aircraft deliveries; changes in laws, regulations and government
policies, particularly those relating to vehicle emissions, fuel economy
and safety; the resolution of pending governmental investigations and the
outcome of pending or threatened future legal proceedings; and other risks
and uncertainties, some of which we describe under the heading “Risk
Report” in Daimler’s most recent Annual Report and under the headings “Risk
Factors” and “Legal Proceedings” in Daimler’s most recent Annual Report on
Form 20-F filed with the Securities and Exchange Commission. If any of
these risks and uncertainties materialize, or if the assumptions underlying
any of our forward-looking statements prove incorrect, then our actual
results may be materially different from those we express or imply by such
statements. We do not intend or assume any obligation to update these
forward-looking statements. Any forward-looking statement speaks only as of
the date on which it is made.

Further Investor Relations information on Daimler is available on the
Internet via Daimler - Investor Relations and on handhelds via
Daimler - Investor Relations.
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post #2 of 2 (permalink) Old 11-26-2008, 07:00 PM Thread Starter
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Cerberus: We Were Misled Into Buying Chrysler

Cerberus: We Were Misled Into Buying Chrysler
Nov 26, 08 2:52 PM

Somehow we don't expect this story to elicit many boo-hoos (unless they're sarcastic, mocking boo-hoos), but Cerberus is complaining that it was misled when acquiring Chrysler from Daimler:

AP: Relations between Chrysler's current and former owners turned ugly Wednesday when private equity firm Cerberus Capital Management LP accused Daimler AG of "intentionally and materially" misleading Cerberus before the German automaker sold Chrysler last year. Cerberus alleged that Daimler breached its obligations in the sale contract, including misrepresenting changes in underwriting practices for vehicle financing and leases.

LINK:Cerberus Says It Was Misled When Buying Chrysler

Both sides are negotiating a settlement, but Cerberus said in a statement that Daimler has "refused to recognize the gravity of the claims relating to its deliberate conduct that resulted in the impairment of Chrysler's business."

Daimler spokesman Han Tjan said Cerberus performed due diligence before the sale and was given all the information it needed to close the deal.

How badly is Cerberus regretting the mess it got itself into when it acquired Chrysler? You have to wonder how much due dilligence Cerberus actually did. Remember, that was a totally different time for private equity, when the name of the game was to slash costs, enjoy uber-low borrowing rates, IPO the stock and profit. Now they're begging for a bailout, or a merger, and their brilliant MBA-CEO is spending his time carpooling back and forth to DC.


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