Some crazy swing plays going on...but looks like Kirk saved me
Without him this could have gone below 7.
Tracinda bids $8.50 a share for 20 million Ford shares
2:43p ET April 28, 2008 (MarketWatch)
SAN FRANCISCO (MarketWatch) - Billionaire investor Kirk Kerkorian, a year after his failed bid to acquire Chrysler marked his latest venture into the auto sector, moved to build his position in Ford Motor Co., sending shares up more than 10% on Monday.
At last check, Ford's stock was up 75 cents at $8.25, following a week of wide swings in the wake of the company's surprise first-quarter profit report. Shares have risen 22% rise since the beginning of the year as restructuring efforts have gained traction.
Kerkorian, typically critical of top management in the U.S. auto sector, announced a bid of $8.50 a share for up to 20 million shares and expressed confidence in Ford's direction.
"Tracinda believes that Ford management under the leadership of Chief Executive Officer Alan Mulally will continue to show significant improvements in its results," Kerkorian's investment group said in a statement.
The bid, totaling about $170 million, amounts to only a fraction of Ford's $16 billion market capitalization, but considering Kerkorian's activist track record, it is likely enough to stir speculation about what's next.
Ford's top executives welcomed what they described as a vote of confidence and an affirmation of the progress in Ford's plan, but they also downplayed the bid.
"Any investor can purchase Ford shares, which are sold on the open market," Chairman Bill Ford and CEO Alan Mulally said in a joint release. "The Ford team remains focused on executing our plan to transform Ford into a lean global enterprise delivering profitable growth for all."
David Healy, an analyst at Burnham Securities, doesn't expect Kerkorian to go after Ford like he did with General Motors Corp. and Chrysler.
"It's déjà déjà vu all over again. He must be bored," Healy said. "A takeover is pretty much out of the question so maybe he's just looking to add more to his portfolio because he really does see the ingredients of a strong turnaround here."
Ford last week offered evidence that its wrenching overhaul is moving along ahead of expectations when it posted a stunning first-quarter profit. See full story.
Kerkorian's move to buy into Ford marks a personal trifecta as far as major U.S. automakers go. He was Chrysler's largest shareholder prior to its sale to Daimler in the 1990s, eventually bidding $4.5 billion to buy the company last year. See full story.
Before the Chrysler bid, he built up a big position GM in an effort to reshape the auto giant. His attempts at putting a new face on the world's biggest automaker failed, but he still walked away with almost $100 million in profit for his efforts. See full story.
In Kerkorian's latest move, the shares to be purchased represent about 1% of Ford's outstanding common stock. Tracinda, of which Kirk Kerkorian is the sole shareholder, currently owns 100 million shares of Ford stock, or about 4.7% of the outstanding shares.
Kerkorian has recently bought stakes in other major companies such as casino giant MGM Mirage and oil refiner Tesoro Corp. .