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Fiat Chrysler hits record high as Morgan Stanley sees dealmaking

[SOUTHFIELD, Michigan] Fiat Chrysler Automobiles NV shares climbed to a record after Morgan Stanley analysts said they see "substantial hidden value" in several of the company's brands that could emerge from spinoffs or sales to other automakers.

Morgan Stanley values the Jeep sport utility vehicle division at 14.7 euros (S$23.60) per share, more than the company's 10.62 euro closing price in Milan Monday, analysts led by Adam Jonas wrote. The Ram brand is worth 6.1 euros a share, and Fiat Chrysler's management and board has "taken to heart" the lessons learned from separating Ferrari NV from the company, Jonas said.

Fiat Chrysler's U.S.-listed shares surged as much as 9.5 per cent and were up 9 per cent to $12.65 as of 1:35 p.m. in New York, headed for their highest close since they started trading October 2014. The stock has jumped 39 perc ent this year.

Chief Executive Officer Sergio Marchionne told analysts last month that the company would evaluate whether to separate from some of its businesses as part of a strategic plan he'll unveil in early 2018, his last major project for the carmaker before planning to retire the following year. Marchionne, 65, also is CEO of Ferrari, which is now valued higher than its former parent company.

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The Morgan Stanley report said it could make sense for Fiat Chrysler to partner with a Chinese company. Trade publication Automotive News reported Monday that Fiat Chrysler had rejected a bid by an unidentified Chinese carmaker that offered a small premium to the company's market value.

Fiat Chrysler representatives declined to comment on the Automotive News report.