Kerkorian Trims Ford Stake, but May Sell All Shares
Billionaire investor Kirk Kerkorian lowered his stake in Ford Motorto 6.1 percent and said he could sell the remainder of his shares in the No. 2 U.S. automaker.
News of a possible exit by the single largest shareholder in Ford sent its shares down nearly 4 percent.
The move comes after a more than 60 percent decline in Ford shares since Kerkorian raised his stake to 6.5 percent in June and said he was willing to support the automaker's turnaround with an infusion of additional capital.
Kerkorian's offer of capital had been widely seen as a boost to Ford's restructuring plans at a time when Detroit's three automakers face increasing scrutiny over their ability to ride out a sharp downturn in U.S. auto sales.
General Motors and Chrysler are in talks about combining the two American automakers in an attempt to shore up cash and survive the industry slump, sources familiar with the plans have said.
Kerkorian's investment vehicle Tracinda said on Tuesday it was reallocating its resources to focus on gaming, hospitality, oil and gas industries where it sees value in light of current economic and market conditions.
Kerkorian, who has invested $1 billion for 140.8 million Ford shares, saw his investment sour over the past months as U.S. auto sales dropped to 15-year lows amid tightening credit and slumping housing prices.
Ford's U.S. sales are down 17 percent in the first nine months of the year, a steeper decline than the industry's 13 percent drop.
Tracinda said in regulatory filings it sold 7.3 million Ford shares Monday in the open market for an average price of $2.43 apiece.
That compares to the more than $7 per share on average Kerkorian had spent to amass his stake in Ford.
Tracinda intends to further reduce its holdings, including the possible sale of all of its remaining 133.5 million shares, or about a 6.09 percent stake, depending on market conditions and available sales prices, it said.
It said it has contacted an investment banking firm regarding the possible sale of shares.
Kerkorian, a long-time activist investor in the auto industry, surprised analysts and Ford executives by announcing in April he had begun to acquire a stake in the automaker.
The Ford family holds a 3 percent stake, but controls 40 percent of the voting power because of a separate class of shares established when the company went public in 1956.
Ford's shares were down about 3.4 percent at $2.25 on the New York Stock Exchange in early trading.