Kerkorian Plans Another Assault on Chrysler Corp.

Strategic Insights -

Billionaire investor Kirk Kerkorian has announced his intention to launch another bid for Chrysler Corp., following his failed attempt to take over the auto maker in April. Chrysler, in an effort to blunt the potential takeover threat, has doubled its stock repurchase program to $2 billion. However, Kerkorian remains unimpressed, with his spokesman describing the move as "another tiny step in the right direction." The investment strategy behind the stock buyback program aims to raise the company's stock price by reducing the number of shares outstanding.

Key Takeaways:

  • Kerkorian, Chrysler's largest shareholder with 13.6% of the company's stock, has announced plans to launch another bid for the auto maker.
  • Chrysler's board of directors has doubled its stock repurchase program to $2 billion in an attempt to reduce the number of shares outstanding and raise the stock price.
  • Kerkorian has hired Jerome York, a 14-year veteran of Chrysler and former chief financial officer of International Business Machines Corp., to assist in the new bid.
  • York's involvement in the bid has been seen as a positive sign, with analysts stating that he could serve as Chrysler's next chief executive.
  • Kerkorian had previously made a $22.8 billion bid for Chrysler in April, which collapsed due to lack of financing.
  • Chrysler's shares have climbed steadily since Kerkorian's initial bid, closing unchanged at $57.62 on the New York Stock Exchange.

Statistics:

  • Kerkorian owns approximately 13.6% of Chrysler's outstanding shares.
  • Chrysler's stock repurchase program has been doubled to $2 billion.
  • Kerkorian's initial bid for Chrysler in April was valued at $22.8 billion.
  • Chrysler's shares have climbed 9.1% since Kerkorian's initial bid was announced.
  • Kerkorian's spokesman stated that the stock buyback program was "another tiny step in the right direction."

Sources:

  • "Kirk Kerkorian plans another bid for Chrysler Corp." - Reuters News Agency (date not specified)
  • "Chrysler to double buyback plan" - Detroit News (date not specified)