Kerkorian May Buy More Chrysler : Autos: Tracinda Corp. files papers with the SEC saying it might increase its holdings in the No. 3 auto maker to 14.9%.
Las Vegas billionaire Kirk Kerkorian, who Tuesday closed a tender offer for 14 million shares of Chrysler Corp. stock at $50 a share, told federal regulators Wednesday that he might buy even more.
After the financial markets closed, Kerkorian’s Tracinda Corp. filed documents with the Securities and Exchange Commission saying it is considering increasing its ownership in Chrysler.
The company said that “given the number of shares tendered” in its $50 a share offer, Tracinda “may purchase additional shares in open market transactions or otherwise to increase its beneficial ownership of shares to 14.9% of the outstanding shares.”
That would bring Kerkorian’s stake in the No. 3 auto maker to a point just below the 15% level at which Chrysler’s “poison pill” anti-takeover provisions would be triggered. The intent of the provisions is to make a takeover prohibitively expensive.
Tracinda said earlier Wednesday that 58.5 million shares were tendered in response to the offer, which expired at midnight Tuesday.
A Tracinda spokesman said the Wednesday filing was to reiterate options that were outlined in previous documents filed with the SEC that said Kerkorian “from time to time in the future” might buy additional Chrysler stock or work with other stockholders to seek changes in the company’s board or management.
Chrysler had no comment on Wednesday’s filing or on the completion of the tender offer.
In May, Kerkorian dropped a proposal to take over the company, with help from former Chrysler chairman Lee Iacocca. That $22.8-billion deal would have tapped Chrysler’s cash reserves to help pay for the buyout. Chrysler’s board rejected the unsolicited proposal, saying the company is not for sale.
Kerkorian’s representatives say his intent is to increase the value of his Chrysler holdings. He is the company’s largest stockholder. Addition of the 14 million shares from the tender offer will bring his holdings to 50 million shares, about 13.1% of the company.
