The news agency Reuters reports that the Blackstone Group is seriously examining the books and expense structure of Daimler's (NYSE:DCX) Chrysler unit. It is rumored in several circles in London that Daimler has a formal offering memorandum regarding Chrysler and that Blackstone is one of three potential, serious buyers. The other two being General Motors (NYSE:GM) and Cerberus Capital Management.

I spoke to a British portfolio manager who runs a European value fund and he feels that Daimler would be worth about $80 if it successfully sheds Chrysler. The Chrysler unit has been a drag on Daimler's core earnings base and has not allowed margins to slightly expand. This portfolio manager feels that Daimler's senior management would also be unencumbered with having to spend the inordinate amount of time on Chrysler's problems.

The more portfolio managers become convinced that Daimler will sell off Chrysler, the more enthused they become about loading up on Daimler's stock.

Those that have studied Daimler carefully believe that a private equity concern would be a better short term parent for Chrysler as the first 6-9 months following the takeover would require extensive and painful cost cutting. Obviously if GM were to be the winner in the Chrysler stakes, the near term hit to GM's earnings may be intolerable for many large institutional shareholders. The beauty of private equity is numbers can be discussed "in general" and specifics can be reported well after the fact.

Whatever happens, its clear here in London that Daimler is quite serious about unloading its American venture and re-building its own credibility and share value.

Georges Yared is the author of "Baby Boomer Investing...Where do we go from here?" and "Stop Losing Money Today"

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