Kerkorian may buy up to 12m more GM shares

DETROIT: General Motors dissident shareholder Kirk Kerkorian told GM he is interested in buying up to 12m more shares of the company as he presses the automaker to enter a three-way alliance with Renault and Nissan.

Shares of GM rose $1.17, or 3.6%, to $33.45 in early trading on the New York Stock Exchange after the news. Mr Kerkorian’s Tracinda already owns 56m shares, or 9.9% of GM’s common stock. If it goes over 10%, it would require a number of regulatory approvals because the company owns banking and insurance interests.

Tracinda said in a Securities and Exchange Commission filing on Thursday that it still supports the alliance between GM and automakers Renault of France and Nissan Motor of Japan.

“Tracinda continues to believe that a strong opportunity exists in a potential alliance between General Motors, Renault and Nissan and that there should be strong General Motors Board involvement in the analysis of such a potential alliance, including the utilisation of independent advisors,” Tracinda’s filing said.

GM, the world’s largest automaker, currently has about 565.6m outstanding shares. A Tracinda purchase of 12m more shares would bring Kerkorian’s stake to 12% of the company. In a statement, GM said Tracinda told the company of its intent on Wednesday night, saying that it would update its filings with the SEC.

“We are seeking the co-operation and support of the company and its management in connection with these filings and any related proceedings, as we believe additional investment by Tracinda in GM would be viewed positively by investors, and your support will maximise the likelihood of obtaining regulatory approval,” the filing said.

In the filing, in the form of a letter to GM chairman and chief executive officer Rick Wagoner, Tracinda told GM it is interested in buying 6m shares of common stock on the open market and may consider buying an additional 6m shares.

The move comes just after Mr Wagoner met with Carlos Ghosn, who heads Renault and Nissan, in Paris on Wednesday and agreed to continue talking about the alliance even though the talks are running into difficulties. The talks are taking place at the behest of Mr Kerkorian and Jerome York, Tracinda’s representative on the GM board.

Renault and GM representatives on Wednesday would not say whether the meeting had addressed differences between Mr Ghosn and Mr Wagoner over how much each side’s shareholders would stand to benefit from an alliance.

According to a report in The Wall Street Journal, Mr Wagoner is pressing Mr Ghosn for a multi-billion-dollar payment to GM as part of any alliance deal, insisting that his shareholders would otherwise be shortchanged.

Brian Akre, a spokesman for the US automaker, said GM believed that “the benefit from the synergies that have been discussed are disproportionate.”

He added, “GM would be looking at ways to alleviate that concern. Speaking hypothetically, that could include a payment, that could include a number of different options.”