KKR has made a bid of less than $7B that was the minimum estimation expected by Fiat, which brings the possibility of the talks to an end, as said by the people, whose name cannot be disclosed as these talks are confidential.
The Italian car manufacturer now looks into other inquiries that it has received for the Magneti Marelli unit, as it is ready to separate the Milan-based company and share distribution among the investors, another effective way to receive a good value and simplify the structure of the group.
Discussion with KKR & Co. can see the Sun again if the company increases the bid for its valuation who wants to merge Marelli with Calsonic Kansei, its Japanese parts manufacturer. The board of Fiat has approved the plan to sell off its auto-parts unit in April.
Fiat and KKR were not agreed to say anything about it. The shares of Fiat fell with 0.8%, in Milan trading, giving a market value of 23B Euros.
Marelli is expected to get an enterprise value of $7.6B depends on its comparison with the competitors and is expected to have more credit rating, as said by the Bloomberg Intelligence in a note. As per the senior credit analyst, Joel Levington, Bloomberg Intelligence, “The car-manufacturer could give Fiat Chrysler with dividends of worth more than $2B.
Before starting the discussion again with KKR, Fiat is more interested in evaluating other potential options for the bidding which includes, Bian Capital, Apollo Global Management, and an unidentified Asian parts provider, said by the people familiar with this matter.