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Kerkorian to Increase Ford Stake

TSC Staff

Activist investor Kerk Kevorian's Tracinda on Monday said it was increasing its stake in FordF, expressing confidence in the automaker's recent turnaround.

Tracinda, in a press release, said it would make a cash offer of $8.50 a share for up to 20 million Ford shares. The offer represents a 13.3% premium to Ford's closing price of $7.50 on Friday. The deal, which represents about 1% of Ford's outstanding shares, would raise Tracinda's total stake to 5.6% of the company.

The automaker on Thursday reported a surprise $100 million profit in the first quarter. In a company statement to announce its intention, Tracinda said it believed Ford's first-quarter results -- despite a harsh economic environment -- suggested it was on its way to a turnaround and it expected to "continue to show significant improvements."

"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 said in a statement.

Kerkorian previously attempted to turn around Ford's Detroit rivals General MotorsGM and Chrysler.

Ford shares were rising 7.2% to $8.04 in recent premarket trading.

Rivals General Motors, ToyotaTM, HondaHMC and DaimlerDAI were mixed in recent trading.