A German court ruled on Monday in favor of former Daimler-Benz shareholders who argued they hadn't been paid enough in the landmark merger. Stuttgart's district court ordered DaimlerChrysler to pay 22.15 euros ($28.54) in cash per share to holders of around 10.5 million shares, after finding that Daimler-Benz shares had indeed been undervalued in the multi-billion-dollar mega deal, a court spokesman said.

The judge's initial proposal of 19 euros per share was rejected by DaimlerChrysler.

Unfair deal

As part of the 1998 merger, which was effectively a takeover of Chrysler by Daimler-Benz, the German carmaker forced shareholders to exchange their shares for new shares in the resulting entity, the world's fifth-largest carmaker. 1.8 percent of Daimler-Benz shares were exchanged involuntarily for shares in the merged company, leaving many convinced their investment had not been valued highly enough.

The takeover of Chrysler by Daimler was officially presented by then CEO Jürgen Schrempp as a "merger of equals."

Ongoing dispute in US

But 17 shareholders on either side disagreed and in 1999 filed complaints against the terms of the deal.

One of them was US investor Kirk Kerkorian. A major shareholder in Chrysler at the time who felt he was shortchanged by the merger, he filed for $3 billion in compensation, claiming Schrempp had deliberately misrepresented the Chrysler acquisition to make the transaction more acceptable to investors and to avoid paying a takeover premium. He lost a high-profile case in 2005 and is currently appealing.

Appeal

Meanwhile, DaimlerChrysler has said it would appeal the Stuttgart ruling, arguing there was no justification in awarding compensation.

"We consider the additional payments inappropriate and will probably appeal," said DaimlerChrysler spokesman Thomas Fröhlich.

DaimlerChrysler shares fell 0.75 percent to 41.10 euros ($52.69) in Frankfurt trading.