The downgrade of GM’s debt by rating agency Standard and Poor’s has not stopped the planned purchase of 28 million shares.
Mr. Kerkorian forged ahead in his bid to increase his Tracinda Corporation’s holding in the troubled Detroit automaker to 9 percent.
To further bolster his bid, Mr. Kerkorian has retained the services of a former auto executive, Jerome York. The move was detailed in a required Securities and Exchange Commission filing yesterday.
Mr. York, a former Chrysler chief financial officer, was instrumental in advising Mr. Kerkorian when he attempted a takeover of Chrysler in 1990. Chrysler became part of DaimlerBenz instead.
Speculation immediately turned to a possible takeover of GM by Mr. Kerkorian, who said this acquisition was for investment purposes only. GM’s stock rose on the news of the Tracinda purchase, which was just before S&P downgraded GM’s debt to junk status.
But Mr. Kerkorian says he does not want to take a seat on GM’s board or takeover the company. However, the SEC filing simply states that Tracinda is not seeking to do either “at this time.”
GM had a bit of advance warning of the purchase, according to the SEC filing. Mr. York paid a courtesy call to GM’s vice chairman, Robert Lutz, last Wednesday. He suggested in turn that they include chief financial officer at GM, John Devine, in the conversation.
Mr. York and Mr. Lutz knew each other at Chrysler before Mr. Kerkorian’s attempt to takeover that company.
David Utter is a staff writer for Murdok covering technology and business. Email him here.
