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Tracinda Tells GM That It May Buy 12 Million Shares (Update3)
Sept. 28 (Bloomberg) — Billionaire Kirk Kerkorian’s Tracinda Corp. told General Motors Corp. it may buy 12 million more GM shares to support the “strong opportunity” for an alliance with Nissan Motor Co. and Renault SA.
Tracinda, which spurred GM into discussions about the alliance earlier this year, included a copy of a letter to GM Chief Executive Officer Rick Wagoner in a U.S. regulatory filing after Wagoner and Renault-Nissan CEO Carlos Ghosn both said today their companies don’t need the alliance to thrive.
Kerkorian’s plan adds pressure on Wagoner, 53. The GM chief said he wants to focus on his own strategy to restructure the world’s largest automaker after losing $10.6 billion last year, though the alliance talks will continue until Oct. 15. Kerkorian is GM’s fourth-largest investor, with a 9.9 percent stake.
“That’s a nice way to keep the pressure on,” said Pete Hastings, a fixed-income analyst at Morgan Keegan Inc. in Memphis, Tennessee.
Shares of Detroit-based GM rose 67 cents to $32.95 at 10:58 a.m. in New York Stock Exchange composite trading. Earlier, the shares advanced as much as 4.2 percent, reaching $33.64, their highest since August 2005.
GM’s Response
“We really have to take some time and review this,” Wagoner said after the Tracinda filing. “There’s nothing more I can say right now.”
The filing reflects a major shareholder’s support of the company’s direction, GM Chief Financial Officer Fritz Henderson told reporters in Paris today. He said it’s “too soon” to say whether GM would support Kerkorian’s request to add as many as 12 million shares to his holdings.
“The key thing is to get the business turned around,” Henderson said.
Tracinda now holds 56 million GM shares. Boosting that stake to more than 10 percent would require regulatory review because of GM’s banking and insurance operations, Tracinda said in the filing. Tracinda asked GM to support the request to increase the holdings.
Kerkorian aide Jerome York said in January that Tracinda might be willing to buy 12 million additional shares if the investment company saw progress in GM’s restructuring. York was appointed to the GM board in February.
In an interview today, Tracinda spokeswoman Carrie Bloom said the company “continues to believe that a strong opportunity exists” for a three-way alliance among GM, Renault and Nissan.
“There should be strong General Motors board involvement in the analysis of such a potential alliance, including the utilization of independent advisers,” Bloom said.
Source : http://www.bloomberg.com/apps/news?pid=20601103&sid=aUTB2VcLkuFM&refer=news