Kerkorian Weighing an ‘Investment’ in Pan Am

A spokesman for Kirk Kerkorian said Friday that the Los Angeles financier is considering an investment in Pan American World Airways but that it is “premature” to say if it could give him control of the struggling carrier.

Terry Christensen, president of Tracinda Corp., Kerkorian’s private holding company, also said in response to questions that a Tracinda subsidiary has an “exclusive” right to examine Pan Am for a certain unspecified time.

“We are looking at it very seriously,” Christensen added. “It is a potential investment that would affect the entire Pan Am--restructuring, union agreements and everything.”

The Times reported Aug. 7 that Pan Am’s unions had approached Kerkorian to see if he might be willing to invest in the airline. Kerkorian, controlling shareholder of MGM/UA Communications, formerly was the major shareholder of Western Airlines, and his new luxury airline, MGM Grand Air, is set to begin service Tuesday.

Christensen said Friday that MGM Grand Inc., a Tracinda subsidiary, has a written agreement with Pan Am “giving (it) an exclusive right to investigate the company for a period of time.” He added: “We have a team in there (at Pan Am) headed by Fred Benninger and Donald J. Lloyd-Jones.” Benninger is president of MGM Grand Inc. Lloyd-Jones formerly was president of Western Airlines.

The Pan Am unions had talked earlier with Anglo-French financier Sir James Goldsmith, reportedly about restructuring the airline and an investment by him of at least $100 million. However, published reports this week said Goldsmith had withdrawn from consideration after studying the airline.

Pan Am earlier this year rejected a union proposal for a restructuring that, the unions said, would save $600 million a year while giving the unions a one-third equity.