Report:Kerkorian Sells Full Stake in GM

Report: Kerkorian Sells Full Stake in GM

Kerkorian did this same game on Jan 25th, 2006 as well.

Link:
http://biz.yahoo.com/ap/060125/gm_kerkorian.html?.v=6

Today's link:

http://biz.yahoo.com/ap/061130/gm_kerkorian.html?.v=19

Report: Kerkorian Sells Full Stake in GM
Thursday November 30, 8:45 pm ET
By Ken Thomas, Associated Press Writer 
Kerkorian Reportedly Sells Entire Stake in GM, 28 Million Shares, for More Than $800 Million

WASHINGTON (AP) -- Dissident General Motors Corp. shareholder Kirk Kerkorian appears to be walking away from his quest to shape the future of the troubled automaker. The Wall Street Journal, citing a person familiar with the matter, reported Thursday on its Web site that the billionaire investor sold his entire remaining investment in GM -- 28 million shares -- at $29.95 a share, a transaction worth more than $800 million.
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The newspaper reported that the shares were sold to Bank of America, a key lender to Kerkorian.

Earlier in the day, Kerkorian's investment company, Tracinda Corp., said in a filing with the Securities and Exchange Commission that it had agreed to sell 14 million shares for $28.75 per share in a private transaction. The move dropped his stake by a third to 4.95 percent, or 28 million shares, for a price of just over $400 million.

Merrill Lynch analyst John Murphy noted that there was a 28 million share block trade in GM stock on the New York Stock Exchange shortly after the filing.

"It appears that Kerkorian may now be out of his entire GM position," Murphy wrote in a research note.

Tracinda spokeswoman Carrie Bloom said she could not comment on the transaction beyond the SEC filing. GM spokeswoman Gina Proia said the company does not comment on the actions of its shareholders. Both declined further comment on the Journal report. A call to a Bank of America spokeswoman was not immediately returned.

GM shares dropped 27 cents to close at $29.23. Its shares have traded in a 52-week range of $18.33 to $36.56.

By reducing his stake to less than 5 percent, Tracinda no longer faced disclosure requirements for its intentions on GM. Kerkorian would be able to sell off his remaining shares without filing with the SEC.

Tracinda said last week it was reducing its stake to 42 million shares, or 7.4 percent of GM, from 56 million shares, or 9.9 percent. As part of that announcement, Kerkorian's investment company said it offered to buy up to 15 million shares of casino and hotel operator MGM Mirage Inc., tightening its control of the company.

"It has all the appearances that he's unwinding his position," said Peter Henning, a former SEC attorney who teaches at Wayne State University Law School in Detroit. "He's playing it very well. We're just left to guess what he's going to do."

Tracinda's decision follows the resignation last month of Jerome York, a key Kerkorian adviser, from the GM board. York wrote that he had "grave reservations" about GM's ability to compete against Asian automakers.

York resigned shortly after GM decided against joining an alliance with Renault SA of France and Nissan Motor Corp. of Japan. The three companies began discussing a potential three-way alliance after public prodding by Tracinda.

GM has undertaken a massive turnaround plan, cutting production and reducing costs by winning health care concessions from the UAW and persuading about 35,000 hourly workers to leave under early retirement or buyout plans.

The investor's stock sale was reported even as GM announced it has completed a deal announced in April to sell a 51 percent stake in its finance unit, General Motors Acceptance Corp., to private investors for about $14 billion.

That was part of the automaker's plan to gain some financial flexibility as it struggles to compete. GM has lost more than $3 billion in the first nine months of the year, and is slashing its U.S. work force in an effort to cut costs.

GM announced in April that it had a tentative deal to sell a 51 percent stake in GMAC to a consortium of investors led by Cerberus Capital Management, a private investment company. The group also includes Citigroup Inc. and Aozora Bank Ltd.

"This transaction will result in a stronger GMAC, with enhanced access to funding at lower costs and greater opportunities for growth, including leveraging their traditionally strong relationships with GM dealers," Rick Wagoner, GM's chief executive, said in a statement.

Standard & Poor's on Thursday downgraded GM shares to "sell" from "hold." Efriam Levy, the rating agency's autos analyst, said in a note to investors that Kerkorian's sale reduces potential pressure to sell the stock and eliminates a catalyst that could push the stock up.

He also said completion of the sale of a 51 percent stake in GM's financial arm is a concern. While the proceeds will help GM's liquidity, GMAC is expected to remain profitable, diluting GM's earnings per share. Levy's note also said he sees "execution risk" in GM's restructuring plan.

Associated Press Business Writer Tom Krisher in Los Angeles contributed to this report.