Filed under: Earnings reports, Deals, Ford Motor (F), General Motors (GM)
Ford Motor Co. (NYSE: F) Chief Executive Alan Mullaly has a friend in cantankerous billionaire Kirk Kerkorian.
Kerkorian, who was Chrysler’s largest shareholder before the company was acquired by Daimler, is snapping up shares in the automaker, which recently posted an unexpected $100 million first quarter profit. Kerkorian’s Tracinda Corp. owns a 4.7% position in Ford and plans to offer to purchase as much as 20 million shares at a 13% premium to Friday’s close, according to The Wall Street Journal (subscription required).
“Tracinda has been following Ford closely since the company released its fourth quarter 2007 results which indicated that Ford’s management was starting to achieve highly meaningful traction in its turnaround efforts,” the company stated in a statement. “Last week this was reinforced by Ford’s first quarter 2008 results, achieved despite the difficult U.S. economic environment. Tracinda believes that Ford management under the leadership of Chief Executive Officer Alan Mulally will continue to show significant improvements in its results going forward.”
At least that’s how Kerkorian feels now.
In 2000, Kerkorian opposed the merger of Daimler and Chrysler, which at the time was heralded a triumph of trans Atlantic deal-making. Last year, he made a $4.5 billion bid to purchase Chrysler from DaimlerChrysler that was rejected. Kerkorian also tried to take over General Motors Co. (NYSE: GM) in 2005.
For now, Ford management is putting a positive spin on Kerkorian’s move, saying it welcomes “confidence in Ford and the progress we are making on our transformation plan.” The company’s shares also are soaring in pre-market trading.
Privately, they must be wondering what the 90-year-old is up to. It’s difficult to believe that he’s going to remain on the sidelines and count his money.
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