Life & Style | Motoring
Billionaire Kerkorian adds $100m in bid to raise Ford stake
Billionaire investor Kirk Kerkorian has added $100 million in financing as part of his bid to increase his stake in Ford Motor Co.
- AP
- Published: 21:42 May 24, 2008
Washington: Billionaire investor Kirk Kerkorian has added $100 million in financing as part of his bid to increase his stake in Ford Motor Co.
Kerkorian's Tracinda Corp. said in a regulatory filing Friday it may borrow as much as $600 million from Bank of America, up from a potential loan of $500 million based on an April 15 agreement.
Kerkorian has offered $8.50 per share for up to 20 million shares of Ford's common stock, a cash offer worth up to $170 million. If he succeeds, his stake in the automaker would rise to 5 per cent from 4.7 per cent.
Ford said in a Thursday filing that its board, in a unanimous decision, had determined the automaker was neutral about Kerkorian's offer and would express no opinion about the potential transaction.
The board's decision to remain neutral came as Ford said it no longer expects to return to profitability by 2009 and is cutting North American production for the rest of this year amid high gas prices and a weak US economy.
Ford shares fell 34 cents, or 4.8 per cent, to $6.83 in midday trading Friday. Ford's stock decline has made Kerkorian's tender even more attractive to investors, offering a premium of almost 25 per cent.
Tracinda spokesman Tom Johnson declined comment on Friday's filing with the US Securities and Exchange Commission. Ford spokesman Mark Truby also declined comment.
Ford, the No 2 US-based automaker, has noted that Tracinda has said it considers the company to be an attractive investment and doesn't plan to acquire or influence control over the carmaker.
In a note to employees on Thursday, Ford President and Chief Executive Alan Mulally and Bill Ford Jr., the company's chairman, reiterated that they welcomed the confidence in their turnaround plan.
"Whatever the speculation or heightened interest in our progress, what is most important going forward is that each of us stays focused on executing our plan," Mulally and Ford said.
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