TURIN, Italy (Reuters) - Fiat's FIA.MI chairman said on Thursday the Italian carmaker was not discussing any out-of-court settlement of a price dispute it must resolve before buying the rest of Chrysler.
Fiat owns 58.5 percent of the U.S. automaker and the right to buy 16.4 percent more from U.S. healthcare trust VEBA at a price determined under a formula worked out in 2009, when Fiat scooped up a worthless Chrysler as it exited bankruptcy.
Fiat and VEBA, which pays healthcare benefits to Chrysler retirees, have ended up in a Delaware court arguing about the price of a resurgent Chrysler, which is now worth billions.
Fiat believes the 41.5 percent it does not already own is worth about $2 billion and VEBA puts it at twice that amount. Most analysts estimate Chrysler's potential market value to be around $10 billion.
Resolution of the dispute would pave the way to buying the rest of Chrysler, Elkann said on Thursday.
"We intend to wait for the Delaware verdict before moving forward on the merger" with Chrysler, said Fiat Chairman John Elkann, speaking to press after a meeting of shareholders in Exor (EXOR.MI), the Milan-listed holding company through which Elkann controls Fiat.
Fiat aims to complete the transaction, merge the two manufacturers into one company then list it on the New York Stock Exchange by 2014.
A settlement with VEBA could hasten the process, which would create the world's seventh-largest auto group by sales and is crucial for Fiat to access Chrysler's cash flow for investment in new models it needs to remain competitive.
Elkann said he did not rule out an out-of-court settlement with VEBA ahead of the verdict, while adding that there were currently no talks towards such a settlement.
The verdict is expected at the end of July, or 90 days from the last hearing on April 25.
Elkann said it was too soon to talk about the timing of the merger given the uncertain timing of the court case.
He said it was premature to discuss whether Exor intended to obtain the same stake in the combined group as the 30 percent it holds in Fiat.
Elkann, who is chairman of Exor, said Fiat was not planning to spin off luxury sportscar maker Ferrari. He said the new company's name would include both Fiat and Chrysler, and that Fiat Chief Executive Sergio Marchionne, who turns 61 next month, will stay on past 2015 to run the combined group.
"Marchionne has said is he willing to stay on," said Elkann. "There will be a lot of interesting things for him to do."
Editing by Tom Pfeiffer