DaimlerChrysler Shares Hit Six-Year High; Kerkorian's Tracinda Buyout Offer Will Probably Need UAW Agreement

Kerkorian bid to buy Chyrsler could be hampered by new collective bargaining agreement with United Auto Workers.

NEW YORK (AP) - DaimlerChrysler AG shares hit a six-year high Thursday, but disputes between Chrysler and the United Auto Workers (UAW) could complicate buyout offers for the automaker, including Tracinda Corp.'s new bid, a Prudential analyst said.

Tracinda, the investment arm of billionaire Kirk Kerkorian, offered Thursday to buy Chrysler for $4.5 billion in cash. Canadian auto parts maker Magna International Inc. is also a bidder, offering a reported $4.7 billion.

Analyst Mark Warnsman said Tracinda may have made its offer public to reach out to the union representatives who make up 50 percent of Chrysler's board of supervisors. Tracinda will probably need their approval, he said, and any company that buys Chrysler will need to create a new collective bargaining agreement with the UAW.

Tracinda offered UAW an equity stake in Chrysler to combat health care costs, Warnsman said, but the union may be concerned about sharing responsibility for those costs.

''We remain concerned about the willingness of the United Auto Workers union to reach an agreement that enhances the competitiveness of Chrysler,'' he wrote in a note to investors.

DaimlerChrysler said Wednesday it is in discussions to sell the Chrysler unit; confirming weeks-old rumors. The stock gained $3.81, or 4.7 percent, to close at $84.80 on the New York Stock Exchange Thursday, having earlier reached $84.90, its highest value since July 1999.