Kerkorian’s Ford 20 Million Tender Offer Attracts Huge Response
Kirk Kerkorian’s investment company, Tracinda has launched a tender offer of 20 million additional shares of Ford Motor Company on May 9, which has been attracting many Ford investors.
The investment company on Tuesday said that its tender offer of $8.50 a share drew offers of more than 1 billion of the company’s shares. It will buy 20 million shares for about $170 million, which will further help the company increase its stake in the automaker to about 5.5 percent.
According to Kevin Tynan, an industry analyst, “Obviously the premium is a motivation, but the motivation is that you don’t see the stock going higher than what the tender offer was.” He further added, “If shareholders believed that $8.50 was just the starting point and it would go higher from there, you would not see that kind of over-subscription to the offer.”
On May 10, Ford stock closed down 3.8 percent to $6.12 a share.
In this context Ford spokesman, Mark Truby had this to say about the investment that the response was “understandable given that the offer represented a significant premium over Ford’s current share price.” He said in a e-mail, “The Ford team remains focused on executing our plan to transform Ford into a lean global enterprise delivering profitable growth for all.”
Reportedly, Tracinda began accumulating 100 million Ford shares, or 4.7 percent of the outstanding stock, on April 2 at an average cost of $6.91 per share.
Tracinda said early in May that it did not have any present intent to acquire or influence control over the business of Ford. It was also said that the company would continue to keep watch over Ford and may be from time to time, propose business strategies and will acquire additional shares.
However the Ford’s board of directors stayed away from commenting on the offer which officially expired on Monday.
