Daimler Could be Takeover Target -OOPS

Washington DC February 27, 2007; The AIADA newsletter reported that experts told CNN that without Chrysler, the Daimler group could be an attractive takeover target for hedge funds and private equity groups. However, even for groups with plenty of cash on hand, Chrysler's pension and health care liabilities are still a significant deterrent. One investment banker said the likelihood of an unsolicited approach was still low but had gone up to 20 percent from 10 percent.

A rump Daimler - comprising Mercedes premium cars, commercial vehicles, and financial services - would probably be able to stay independent as long as it does not have to refinance Chrysler with several billion euros.

"They are obviously a group that doesn't have a protective shareholder so they can never be complacent," he added, noting a business hiccup could open the door to an unsolicited approach.

DaimlerChrysler declined to comment on prospects for being acquired if it divests Chrysler, but has said in the past the best defense against takeovers was good financial performance.