Kerkorian resolved to close Ford deal
Kirk Kerkorian’s Tracinda Corp. waived a condition Friday on its $170-million cash tender offer for Ford Motor Co. that would have allowed the billionaire activist’s investment arm to pull out of the deal if the automaker’s shares fell 10%.
The shares had fallen 18% since Tracinda’s May 9 offer, and Ford said last week that it no longer expected to return to profitability by 2009.
The Dearborn, Mich.-based automaker is cutting North American production for the rest of this year as high gasoline prices and a weak economy cut into sales.
Ford said Friday that it planned to build its new Fiesta subcompact at a factory near Mexico City for sale in the U.S.
The move is a blow to the United Auto Workers union, which last year approved a contract that granted concessions to the automaker. UAW President Ron Gettelfinger said earlier this year that the union would try to convince Ford that the automaker could make money building its smallest cars in the U.S. Currently, all Ford subcompacts sold in the U.S. are built overseas, he said.
Tracinda said Friday that it continued to believe in Ford’s management and turnaround efforts and remained committed to its offer, which is scheduled to expire June 9.
Tracinda launched a cash tender offer May 9 for as many as 20 million Ford shares at $8.50 apiece, a slight premium over the May 8 closing price of $8.20.
Ford said last week that its board was neutral about Kerkorian’s offer, which would boost his ownership to 5.5%.
Ford shares rose 9 cents, or 1.3%, to $6.80 on Friday.