Kerkorian bids to boost Ford stake
Looking to control more than 5% of automaker, financier offers to buy 20 million shares for $170 million, and says he already owns 100 million shares.

Kirk Kerkorian is offering $170 million for an additional 20 million shares of Ford on top of 100 million shares he has purchased over the last three weeks.
Ford escapes downturn

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NEW YORK (CNNMoney.com) -- Billionaire financier Kirk Kerkorian announced Monday that he's offering $170 million for 20 million shares of Ford Motor, which - combined with the 100 million shares he purchased earlier this month - would boost his stake in the automaker above 5%.

Shares of Ford jumped 55 cents, or 7.3%, to $8.05 in pre-market trading on news of the offer.

Kerkorian's investment firm, Tracinda Corp., announced the $8.50-a-share offer for Ford (F, Fortune 500) shares in a statement.

The price represents a 13.3% premium over Friday's closing price of $7.50. The 20 million shares would represent just under a 1% stake in Ford on top of the 4.7% stake Tracinda - whose sole shareholder is Kerkorian - said it now owns.

Ford issued a statement in which CEO Alan Mulally said he welcomes confidence in the company and the progress it is making in its transformation plan. Since 2005, the company's cost-cutting efforts have tried to stem losses in Ford's core North America operations.

Tracinda said it has been buying shares since April 2, when shares were trading at between $5.93 and $6.33 a share. It said the average price for the 100 million shares was $6.91.

Shares of Ford jumped as high as $8.79 in trading Thursday, after reporting a surprise $100 million first-quarter net income, before retreating to $8.40 at the close. It gave up much of that gain in trading Friday.

Kerkorian's statement said he was making the offer because of his confidence that the company will seeing continued improvement in its financial results under the leadership of CEO Alan Mulally.

"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," said Tracinda's statement. "Last week, this was reinforced by Ford's first quarter 2008 results, achieved despite the difficult U.S. economic environment."

Still despite the improvement and the better than expected results, Ford announced it continued to lose money in its core North American auto operations in the quarter.

Kerkorian made a similar tender offer to buy shares of General Motors (GM, Fortune 500) back in 2005, and he pushed the company toward a number of steps, including a cut in its dividend to preserve cash and a cut in executive and director pay in order to win concessions from unions.

But he was unsuccessful in his efforts to push GM to combine with the alliance between French automaker Renault and Japanese automaker Nissan. He eventually sold his stake in GM in 2006, giving him a slight trading loss on his investment, but a narrow profit when considering dividends.

He also was once the largest individual shareholder of Chrysler until its purchase by German automaker Daimler Benz in 1998. When Daimler put Chrysler up for sale in 2007, he announced a $4.5 billion offer for that company, only to lose out to private equity firm Cerberus Capital Management.