Kerkorian adds to loan for Ford Motor shares
WASHINGTON -- Billionaire investor Kirk Kerkorian has added $100 million in financing as part of his bid to increase his stake in Ford Motor Co.
Kerkorian's Tracinda Corp. said in a regulatory filing Friday it may borrow as much as $600 million from Bank of America, up from a potential loan of $500 million, based on an April 15 agreement.
Kerkorian has offered $8.50 a share for up to 20 million shares of Ford's common stock, a cash offer worth up to $170 million. If he succeeds, his stake in the automaker would rise to 5 percent from 4.7 percent.
Ford said in a Thursday filing that its board, in a unanimous decision, had determined the automaker was neutral about Kerkorian's offer and would express no opinion about the potential transaction.
The board's decision to remain neutral came as Ford said it no longer expects to return to profitability by 2009 and is cutting North American production for the rest of this year amid high gas prices and a weak U.S. economy.
Ford shares fell 29 cents, or 4.1 percent, to $6.87 in trading Friday.
Ford's stock decline has made Kerkorian's tender even more attractive to investors, offering a premium of almost 25 percent.
Tracinda spokesman Tom Johnson declined comment on Friday's filing with the U.S. Securities and Exchange Commission. Ford spokesman Mark Truby also declined comment.
Ford, the No. 2 U.S.-based automaker, has noted that Tracinda has said it considers the company to be an attractive investment and doesn't plan to acquire or influence control over the carmaker.
In a note to employees on Thursday, Ford President and Chief Executive Alan Mulally and Bill Ford Jr., the company's chairman, reiterated that they welcomed the confidence in their turnaround plan.
"Whatever the speculation or heightened interest in our progress, what is most important going forward is that each of us stays focused on executing our plan," Mulally and Ford said.
Tracinda has said the offer runs until June 9, unless it is extended.
Ford's filing on Thursday also indicated that Tracinda officials have "suggested the possibility of a future meeting between Mr. Kerkorian and representatives of Ford."
Ford said in the filing the meeting has not been scheduled and is not expected to happen "before mid-June at the earliest."