Kirk Kerkorian unloads portion of Ford stake

By Carol Eisenberg

October 21, 2008 at 3:32pm

Billionaire Kirk Kerkorian is dumping part of his stake in Ford Motor Company after losing nearly two-thirds of his $995 million investment.

Six months after strongly endorsing the company’s turnaround efforts under CEO Alan Mulally, he may pull out of the company altogether. His Tracinda Corporation has contacted an investment bank about unloading the rest of his holding, according to Bloomberg News.

Kerkorian, 91, had seen the value of his 6.5-percent stake in the Dearborn, Mich. automaker nosedive in recent months as a result of the cascading effects of rising gas prices, which cut demand for pickup trucks and sport-utility vehicles, and the credit squeeze, which prevented would-be buyers from getting car loans.

He had been the largest individual shareholder outside of the Ford family.

Tracinda, his private holding firm, sold 7.3 million Ford shares yesterday for an average of $2.43 each, according to an SEC filing. Tracinda’s remaining 133.5 million shares were valued at $311.1 million yesterday.

In the future, Tracinda will focus on gambling, hotels and energy, according to a prepared statement. The firm is the majority owner of MGM Mirage, the world’s second-largest casino company, and also holds a 35-percent stake in Denver-based Delta Petroleum Corp., according to Bloomberg.

Kerkorian, a film and casino mogul who appears on Forbes billionaires’ list, had expressed strong enthusiasm this spring about Mulally’s plans to revamp Ford with job cuts, plant closings and new car models in the wake of the company’s $23.9 billion losses since 2005.

But Ford’s stock has tumbled 68 percent in the last six months, which is about the time period he began accumulating his stake in the company.

Kerkorian has made several forays into the auto industry.

In 1995, he led a hostile takeover bid for the former Chrysler Corp. and won a board seat in exchange for calling off his attack. Later, he unsuccessfully sued the new DaimlerChrysler, accusing it of misleading investors about Daimler-Benz AG’s 1998 purchase of the U.S. automaker.

Last year, he was among unsuccessful bidders to buy Chrysler from Daimler AG.

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