Fiat Chrysler's CEO thinks hedge funds can sway GM's board for a merger, says the Wall Street Journal. One analyst says a deal would make no sense. Fred Katayama reports.
The unrequited suitor is back. The Wall Street Journal reports Fiat Chrysler CEO Sergio Marchionne is trying to enlist activist investors to persuade General Motors to say yes to a merger. He has seen hedge funds successfully pressure GM into issuing a big stock buy back and made note of CEO Mary Barra's willingness to work with them, says the Journal. Marchionne has been publicly saying the industry needs to shrink so car companies can make the big investments they need. His latest move comes several months after he had emailed Barra suggesting that their companies merge. But the New York Times reports that Barra and other GM executives showed no interest. Sources say Marchionne seeks a big deal to fix his company's weaknesses and mark his legacy. Fiat Chrysler shares were flat in Milan. Sterne Agee senior analyst Michael Ward sees little chance of a marriage. He said, "It's one of the dumbest things I've ever heard. GM had the chance to get Chrysler for free. Why pay Sergio billions for it? Overlapping cost inefficiencies make absolutely no sense. Activist shareholders are smarter than that." The Journal says Marchionne has yet to find a patron.