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DaimlerChrysler sells shares of Mitsubish and prices drop

Shares of Mitsubishi Motors Corp. fell as much as 12 percent after DaimlerChrysler AG, the world's fifth-largest carmaker, sold its entire 12.4 percent stake and ended a five-year investment in the Japanese company.

Shares of Mitsubishi Motors, Japan's fifth-largest automaker, fell as much as 36 yen to 263 yen, the biggest intraday decline since Aug. 3, 2004. Goldman Sachs Group Inc., which bought DaimlerChrysler's 548.15 million Mitsubishi Motors shares, sold the entire stake to unidentified investors.

"Some investors are concerned about the identity of the buyers of DaimlerChrysler's stake" and may prefer the shares to remain with one single investor, said Harushige Kobayashi, an equity strategist at Maruwa Securities Co. in Tokyo.

DaimlerChrysler, which paid $2.2 billion in 2000 and 2001 for 37 percent of Mitsubishi Motors, reversed its expansion plan in Asia after the maker of Pajero sports-utility vehicles admitted to hiding defects. Stuttgart, Germany-based DaimlerChrysler balked at joining a 496 billion yen ($4.2 billion) bailout last year of the Japanese carmaker, opting instead to sell its Asian assets to focus on improving profits at Chrysler and Mercedes-Benz.

Losing DaimlerChrysler may increase the volatility of the shares of Tokyo-based Mitsubishi Motors, said Mizuho Investors Securities Co.'s analyst Atsushi Kawai.

DaimlerChrysler said on Friday it will book a gain of about 500 million euros ($585 million) on the sale of its Mitsubishi Motors stake. Mitsubishi Motors shares have more than doubled this year in Tokyo to a 41-month high of 363 yen on Nov. 8.

Mitsubishi Motors was pledged a total of 1 trillion yen from investors and shareholders in two bailout attempts last year. Goldman Sachs still owns 1.04 percent of Mitsubishi Motors after selling the stake it bought from DaimlerChrysler, the Japanese carmaker said today.


Contributing: Eijiro Ueno and Jeremy van Loon


E-mail: nfujimura@bloomberg.net