DaimlerChrysler AG has announced that it is pleased that Tracinda Corporation has now authorised DaimlerChrysler to re-file an unedited version of DaimlerChrysler’s memorandum in support of its motion for summary judgment in the Delaware securities action begun by Tracinda in November 2000.
Tracinda initially did not authorise publication of confidential Tracinda information obtained by DaimlerChrysler and used in the memorandum to support DaimlerChrysler’s positions. As a result, the public version of the memorandum initially filed this morning was extensively edited.
DaimlerChrysler has released parts of the brief in unedited form and it includes, among other statements, the following:
* “Tracinda Believed the Merger Was ‘Compelling’ and the Time for It Was ‘Now.’ — By early March Tracinda already had concluded the proposed business combination was ‘compelling.’ This was long before it received the ‘detailed proposal for effectuating the “merger of equals”‘ Eaton allegedly told [Tracinda Chairman Kirk] Kerkorian would be presented to Chrysler‘s Board in May. In a memorandum to Kerkorian and [Tracinda executive and Chrysler director James] Aljian dated March 4, 1998, [Tracinda Vice Chairman Jerry] York concluded the ‘[s]ituation is compelling to do the merger’ and ‘[n]ow is the time to do it, b[e]fore the Chrysler-specific risks materialize.’ York stressed ‘no conceivable Chrysler standalone plan can achieve the value of the synergies of a merger.'”
* “Tracinda Concluded in April 1998 Chrysler Should Not Seek a Higher ‘Buyout Price.’ — By April 1998, Tracinda believed the potential value of a merger between Chrysler and Daimler-Benz was so great and was so eager for the proposed transaction to be consummated that it feared Chrysler would bargain for too high a ‘buyout’ price. York was especially concerned Daimler-Benz shareholders would not approve a transaction at a higher price.”
* “Tracinda Admits the Business Combination Agreement Embodied the ‘Merger of Equals’ It Expected. — Kerkorian admitted the Business Combination Agreement ‘fully reflected and effectuated the merger of equals that Eaton’ told him about. Aljian conceded all the terms that were important to Kerkorian were included in the Business Combination Agreement. This sworn testimony confirms Tracinda’s prior judicial admission the Business Combination Agreement ‘detailed the manner in which Daimler-Benz and Chrysler would “combine … in a merger of equals transaction.”‘”
* “Tracinda Intentionally … Disclos[ed] the Negotiations to The Wall Street Journal Prior to Final Action on the Merger…. — On May 5, 1998, Aljian used the Helmsley-Palace Hotel fax to transmit to York a confidential Chrysler draft press release and other draft media materials he had received under cover of strict confidentiality in his capacity as a Chrysler director. On the morning of May 6, 1998, before Chrysler’s Board approved the Merger, The Wall Street Journal reported, based on statements made by ‘people familiar with the talks,’ that the companies were engaged in negotiations and ‘Chrysler Might Merge With Daimler-Benz — Or be Taken Over.’ Tracinda admits it was the source of The Wall Street Journal’s information ….”
DaimlerChrysler says the brief further supports its defence that there is no evidence supporting Tracinda’s claim of fraud.