DETROIT, June 3 (Reuters) - General Motors Corp. has hired U.S. investment banks to advise it on the possibility of taking over the remaining 80 percent of Fiat SpA's auto unit that it does not own, Automotive News reported on Monday.
The weekly industry publication, citing an unnamed GM executive, said the company is considering paying a fair market price for the shares of Italian automaker Fiat Auto, but not taking on its debt. Alternatively, GM is considering assuming all of its liabilities and getting the shares for free.
GM declined to comment on the report, which did not name the investment banks that it said were acting as advisers. GM officials stood by their earlier comments that GM has not had any conversations with Fiat about accelerating a "put" option that gives Fiat the right to sell the remaining 80 percent of Fiat Auto to GM at a fair market value between January 2004 and July 2009.
Some Wall Street analysts remain skeptical that GM may act before 2004 to buy money-losing Fiat Auto, which has suffered from falling market share in Europe.
"At the moment, I don't think that's a high probability," Deutsche Banc analyst Rod Lache told Reuters. "I think GM realizes that it's not a particularly compelling acquisition for them right now."
Lache said that such a deal could hurt GM's stock price, and the Detroit automaker could buy Fiat's assets at a cheaper price if it waited.
The GM source told Automotive News that the automaker has "a very detailed integration plan that involves all business areas. We are prepared for day one. We can start immediately with full integration of Fiat into GM Europe."
GM agreed in March 2000 to buy a 20 percent stake in Fiat Auto for $2.4 billion in GM common stock. The deal excludes Fiat's Ferrari and Maserati high-end sports car brands.