Kerkorian Says He Has No Immediate Plans to Buy More of Chrysler : Auto maker: Head of Tracinda Corp. advises SEC that his current 9.77% stake ‘is solely for the purpose of investment.’
California billionaire Kirk Kerkorian disclosed today he has no immediate plans to add to his 9.77% stake in Chrysler Corp.
In a filing today with the Securities and Exchange Commission, Kerkorian said the purchase “is solely for the purpose of investment.”
He said he will consider general economic, money and stock market conditions in determining whether to buy more Chrysler shares.
Chrysler disclosed on Friday that Kerkorian had purchased about 9.8% of its stock, making him the company’s largest stockholder.
Kerkorian said today in a report filed with the SEC that his stake in Chrysler as of last Friday was 22 million shares, or 9.77%
The stock was purchased, mostly on the open market between Oct. 11 and Nov. 16, at prices ranging from $10.50 to $11.25. Large, privately negotiated transactions for cash in Chrysler stock were made on Nov. 19, Dec. 10 and Dec. 12 at prices ranging from $11.25 to $13.30 per share, the filing said.
The total price was $272 million.
Kerkorian said he and his Beverly Hills-based Tracinda Corp. “have no present intention to purchase any additional shares” of Chrysler common stock. He said he had no plans to press for “an extraordinary corporate transaction” such as a merger, reorganization or liquidation.
The SEC filing is required of anyone who purchases more than 5% of a company’s outstanding common stock.
Buying into struggling Chrysler Corp. during an auto industry recession may seem, on its face, like an unwise move. But some analysts believe that Kerkorian may turn a tidy, quick profit.
“Most people assume this is nothing more than someone who views the stock as undervalued,” said Michigan state Treasurer Robert Bowman. The state controls about 6.5 million shares, or about 3%, of Chrysler’s outstanding stock.
Analyst Charles Brady of Oppenheimer & Co. of New York said the investment makes sense. “Barring a nuclear war in the Middle East, he gets his money back,” said Brady, who is bullish on the Big Three.
But William Steele of Dean Witter Reynolds Inc. in San Francisco doubts that Kerkorian is a passive investor.
“It seems to me that a passive investor is somebody who’s after dividends and price appreciation,” he said. “His past history doesn’t show that he is a passive person.”
Kerkorian made the Chrysler purchase less than two months after his sale of MGM-UA Communications Co. for $1.3 billion became final. He received an estimated $950 million to $1 billion.
