Kerkorian’s Tracinda Offers to Buy 20m Shares of Ford Common Stock

…at a plumped-up price of $8.50 per share, too

by David Surace

04.28.2008

This morning Kirk Kerkorian’s holding corporation, Tracinda, made it possible for thousands of auto-heads to forego their morning coffee with the announcement that it plans to make a cash offer for 20 million common shares of Ford Motor Co. stock, which would be added to the 100 million shares they already own. The total would end up at about 5.6% of Ford’s total outstanding shares, which is certainly not hostile takeover territory. The price they offered, $8.50 per share, is actually 13.3% higher than Friday’s closing price of $7.50 a share.

Whether Kirk & Co. made the decision based on the 13.3% figure or went with the “let’s just make it a buck more” strategy is still up for debate. More brilliant analysis after the jump.

This news comes somewhat warm on the heels of Ford’s announcement last week that it tendered an actual profit ($100m USD) during Q1 of this year, thanks to brilliant products overseas and a smaller-than-expected loss Stateside. Far from being coincidental, the Tracinda purchase is considered a good-faith maneuver, or perhaps just good old-fashioned investorship: “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.”

The rest, as they say, is in the full text of the press release.

PRESS RELEASE: Tracinda Announces Tender Offer for 20,000,000 Shares of Common Stock of Ford Motor Co.

LOS ANGELES–(BUSINESS WIRE)–Tracinda Corporation today announced that it intends to make a cash tender offer for up to 20,000,000 shares of common stock of Ford Motor Company (NYSE: F) at a price of $8.50 per share. The offer price represents a 13.3% premium over Ford’s closing stock price of $7.50 on April 25, 2008 and a 38.7% premium over Ford’s closing stock price on April 2, 2008, the day upon which Tracinda began accumulating shares in the company.

The shares to be purchased pursuant to the offer represent approximately 1% of the outstanding shares of Ford Motor Company common stock. Tracinda Corporation, of which Kirk Kerkorian is the sole shareholder, currently owns 100,000,000 shares of Ford common stock, which represents approximately 4.7% of the outstanding shares. Tracinda’s average cost for such shares is approximately $6.91 per share. Upon completion of the offer, Tracinda would beneficially own 120,000,000 shares of Ford common stock, or approximately 5.6% of the outstanding shares.

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. 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.

Once the tender offer is commenced, offering materials will be mailed to Ford stockholders and filed with the Securities and Exchange Commission. Ford stockholders are urged to read the offering materials when they become available because they will contain important information.

The tender offer will be subject to customary conditions for transactions of this type, including expiration of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Tracinda’s offer will not be subject to financing.

Author: Chris Haak

Chris is Autosavant's Managing Editor. He has a lifelong love of everything automotive, having grown up as the son of a car dealer. A married father of two sons, Chris is also in the process of indoctrinating them into the world of cars and trucks.

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3 Comments

  1. Unless he’s gone senile in the past year, he generally buys low and sells high. He must see some value there for the future.

  2. Autoblog mentions his former moves as we knew like the suing of DailmerChrysler for its deceptive “merger of equals”, tried to buy Chrysler from Dailmer and tried to make a deal between GM and Renault-Nissan.

    I think as “likearock00” mentionned on GMInsidenews, then “Captain Kirk” wants to see Ford doing a alliance with another carmaker but now then Carlos Ghosn of Renault-Nissan beginned to dance with Chrysler. It could be someone else like Peugeot-Citroen, which they have a joint-venture for diesel engines or Fiat or another player other then Renault-Nissan.

  3. As has been said elsewhere the Ford family has ultimate control over this company, so all Kerkorian is interested in is making more money.

    While I wished he wasn’t so keen on selling off the European brands I think Alan Mulally is doing all the right things to rebuild Ford.

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