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Kerkorian's investment company buying 20M more Ford shares as tender draws huge response

Kerkorian's investment company buying 20M more Ford shares as tender draws huge response

Billionaire Kirk Kerkorian's investment company said Tuesday its tender offer for 20 million additional shares of Ford Motor Co. attracted a huge response and will easily enable it to increase its stake in the automaker to about 5.5 percent.
Tracinda Corp. said in statement its tender offer of $8.50 a share drew offers of more than 1 billion of the company's shares. It will buy 20 million shares for about $170 million.
Nearly half of Ford's 2.17 billion outstanding shares were tendered.
"The response from investors is understandable given that the offer represented a significant premium over Ford's current share price," said Mark Truby, a Ford spokesman.
"The Ford team remains focused on executing our plan to transform Ford into a lean global enterprise delivering profitable growth for all," Truby said in an e-mail.
Tracinda launched a cash tender offer on May 9 for the additional shares, which was a slight premium to the stock's May 8 closing price of $8.20.
But Ford shares have since declined more than 20 percent and were down 26 cents, or 4.1 percent, to $6.10 in morning trading Tuesday.
The Dearborn, Michigan-based automaker announced last month that it no longer expected to return to profitability by 2009. Ford is cutting production in North America for the rest of this year as high gas prices and a weak economy cut into sales.
Tracinda began accumulating 100 million Ford shares, or 4.7 percent of the outstanding stock, on April 2 at an average cost of $6.91 per share.
Ford's board of directors had said it was neutral and would express no opinion about the offer.
The tender offer officially expired at 5 p.m. on Monday. Tracinda had the option not to buy the additional shares under certain circumstances. They included: "any change or prospective change in the affairs" of Ford that has a "materially adverse effect" on the company or any event that "would adversely affect the extension of credit by banks or other financial institutions."
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On the Net:
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Updated : 2021-04-12 03:47 GMT+08:00