An auto industry analyst has said that Chrysler Group LLC, which is majority owned by Italy’s Fiat SpA, could be worth as much as $13.5 billion just three years after the company filed for bankruptcy. The valuation issue has come up because Fiat and a United Auto Workers (UAW) union trust fund that owns 41.5% of the company are in a dispute over an IPO for the now-healthy company.

The Wall Street Journal reports that the UAW Retiree Medical Benefits Trust wants Chrysler to register 16.6% of its shares for a public offering. The UAW’s demand was part of the 2009 agreement that led to Chrysler’s emergence from bankruptcy.

Fiat is trying to accumulate more shares of Chrysler as a step toward a full merger of the two companies. Last year the Italian firm exercised a call option on an additional 3.3% stake in Chrysler, which cost Fiat just $139.7 million. The union trust sought $343 million, which would have valued Chrysler at about $10.4 billion instead of the $4.2 billion valuation based on Fiat’s purchase price.

Now Fiat wants to exercise a second call option for another 3.3% stake at a proposed price of $198 million, valuing Chrysler at about $6 billion.

The union probably doesn’t really care much one way or the other about an IPO, but it certainly must hate having to sell parts of its stake in Chrysler for what it believes are cut-rate prices.

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