Investors rushed to help billionaire Kirk Kerkorian build a 5.5 percent stake in Ford Motor Co., his Tracinda Corp said Tuesday.
Nearly half of Ford's 2.2 million outstanding shares were tendered after Kerkorian made an offer of 8.50 dollars per share in order to sweep up 20 million shares at a cost of 170 million dollars.
The offer represents about a 35 percent premium over current share prices and was oversubscribed by more than 50 times.
“The response from investors is understandable given that the offer represents a significant premium over Ford's current share price,” Ford spokesman Mark Truby told AFP.
Truby declined to comment on expectations that Kerkorian would use his stake to pressure the company to deepen its restructuring plan in the face of declining sales.
“We're going to continue to focus on our plan and bringing our company back to profitable growth,” Truby said.
Kerkorian's stake in the company is now nearly double that of the Ford family, which nonetheless retains a 40 percent voting right because their three percent stake is held in a different class of stock.
The 90-year-old investor, who made a fortune off Las Vegas casinos, has used large stakes in General Motors and Chrysler to try to force change at those companies.
Kerkorian has so far indicated confidence in the current Ford management and given no indication he wants to actively influence the company. Tracinda said in its April 28 offer that it was upping its stake because the troubled automaker is making “meaningful traction in its turnaround efforts.”
But Ford recently said it no longer anticipates returning to profitability in 2009 and announced plans to slash production of trucks and sport utility vehicles after demand for the gasoline guzzlers collapsed in the face of high fuel prices.
