Billionaire Kirk Kerkorian said April April 28 he is building up a stake in Ford Motor Co. as he praised the troubled automaker's "meaningful traction in its turnaround efforts." Kerkorian, who has failed in bids to acquire Chrysler and steer General Motors Corp. into an alliance with Renault-Nissan, said he has built a 4.7% stake in Ford in three weeks and is seeking another one percent of the second-largest U.S. automaker.
In a statement, Kerkorian's personal holding company Tracinda Corp. said it was seeking 20 million share of Ford at $8.50 a share -- a 13.3% premium over Ford's closing price April 25. The offer represents 38.7% premium to the stock's price on April 2, when Tracinda began accumulating a stake in Ford. Upon completion of the deal Kerkorian would own about 5.6% of Ford.
"Tracinda has been following Ford closely since the company released its fourth-quarter 2007 results which indicated that Ford's management was starting to achieve highly meaningful traction in its turnaround efforts," the statement said. "Last week this was reinforced by Ford's first-quarter 2008 results, achieved despite the difficult U.S. economic environment. Tracinda believes that Ford management under the leadership of chief executive officer Alan Mulally will continue to show significant improvements in its results going forward."
Ford executives welcomed Kerkorian's investment but appeared to distance themselves from the idea of letting Kerkorian steer the company in a new direction. "We welcome confidence in Ford and the progress we are making on our transformation plan," Mulally and Ford chairman Bill Ford said. "Any investor can purchase Ford shares, which are sold on the open market. The Ford team remains focused on executing our plan to transform Ford into a lean global enterprise delivering profitable growth for all."
Copyright Agence France-Presse, 2008
