(Corrects fourth paragraph to show currency as dollars, not euros.)

Nov. 26 (Bloomberg) -- Daimler AG, the world’s second- largest maker of luxury cars, said the sale of its remaining stake in Chrysler LLC has been made more difficult by the “exaggerated demands” of Cerberus Capital Management LP.

Cerberus’s demands concerning Daimler’s 19.9 percent holding in Chrysler exceed the value of the $7.2 billion the private-equity firm invested for its 80.1 percent stake, the Stuttgart, Germany-based company said in a statement today.

Daimler wants to sever ties with Chrysler as the third- largest U.S. automaker continues to weigh on its earnings, erasing 373 million euros ($483 million) from second-quarter profit. Daimler bought Chrysler in 1998 for $36 billion and sold a majority holding to New York-based Cerberus in August 2007 as losses mounted. The remaining stake was assigned a book value of zero in a third-quarter earnings report on Oct. 23.

“Cerberus probably has its back to the wall financially to make such huge demands,” said Juergen Pieper, an analyst at Bankhaus Metzler in Frankfurt who interprets today’s statement as indicating Cerberus wants Daimler to pay it more than $7.2 billion to take over the stake. “There’s a risk here for Daimler, but in these kinds of cases the two sides usually end up reaching a settlement.” He recommends selling Daimler shares.

Daimler rose 52 cents, or 2.1 percent, to 24.70 euros in Frankfurt. The stock has declined 63 percent this year, valuing the automaker at 23.8 billion euros.

‘Absurd Allegations’

“The claims made now go beyond the framework of the contractually agreed possible obligations,” Daimler said in today’s statement. “The new claims also include an allegation of conduct outside the ordinary cause of business by Daimler during the time between signing and closing of the transaction, as well as the allegation of incomplete information about the business. Daimler rejects these absurd allegations.”

Chrysler spokeswoman Lori McTavish wouldn’t immediately comment on the report. Cerberus spokesman Tim Price didn’t immediately return a message left on his mobile telephone.

Daimler spokesman Thomas Froehlich said by phone that “the talks are not terminated and they have not failed,” while declining to elaborate on Cerberus’s demands.

The completion of Daimler’s separation from Chrysler would make a contemplated merger or sale of the Auburn Hills, Michigan-based company less complicated. Cerberus had been in discussions with General Motors Corp. about a potential merger until the Detroit-based automaker set aside talks to focus on its liquidity crisis.

To contact the reporters on this story: Chris Reiter in Berlin at creiter2@bloomberg.net; Mike Ramsey in Southfield, Michigan, at mramsey6@bloomberg.net.

Last Updated: November 26, 2008 16:32 EST