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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 enable it to increase its stake in the automaker to about 5.5 percent.
Tracinda Corp. said in a statement its tender offer of $8.50 a share drew offers of more than 1 billion of the company's shares, nearly half of Ford's 2.17 billion outstanding shares.
Tracinda said it will buy 20 million shares for about $170 million. A spokesman for the investment company declined comment.
Efraim Levy, a senior industry analyst with Standard & Poor's, said in a note to investors that the response from investors was not a surprise.
"The offer was a modest premium to (Ford) shares when originally launched, but the share price has retreated over 20 percent since then," he wrote.
Ford spokesman Mark Truby said the investor response was "understandable given that the offer represented a significant premium over Ford's current share price."
"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. Ford shares were down 22 cents, or 3.5 percent, to $6.14 in late morning trading.
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 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.
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:
http://www.ford.com


Updated : 2021-04-22 12:18 GMT+08:00