1:14 p.m.
FRANKFURT, Germany (AP) — DaimlerChrysler AG must pay about $295 million to former shareholders of Daimler-Benz AG to settle a case related to its 1998 merger with Chrysler Corp., a German court said today.
The automaker must pay a group of investors $28.42 per share to resolve the dispute over the valuation of their stock, said Till Jakob, a spokesman for the state court in Stuttgart.
DaimlerChrysler spokesman Thomas Froehlich said the court had not informed the company of the decision, but added: “We consider the additional payments inappropriate and will probably appeal.”
During the 1998 deal, 1.8 percent of Daimler-Benz shares were exchanged involuntarily for shares in the merged company.
Some shareholders claimed that the exchange ratio used undervalued their shares, and they started court proceedings in 1999.
Bernhard Schabel, another court spokesman, said the case was filed by 16 shareholders. The court appointed a lawyer as a 17th plaintiff to represent other investors in the same position who didn’t complain.
Mr. Schabel said the investors held a total of about 10.5 million shares, indicating a total payout of $298.2 million.
The merger led to several legal cases for DaimlerChrysler — most prominently, a legal battle with billionaire investor Kirk Kerkorian, who sought more than $1 billion.
Mr. Kerkorian said Daimler-Benz engineered a takeover of Chrysler, then cheated him out of an acquisition premium by claiming it was a merger of equals. A Delaware court rejected his suit last year.
In 2003, the company agreed to pay $300 million to settle a class-action lawsuit filed by other investors who said they were misled. DaimlerChrysler denied the charge but said it settled the case because of the risk a jury might reach a different conclusion.
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