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Kerkorian Cuts GM Holdings


 

General Motors Corp.’s largest, and arguably most troublesome shareholder, Kirk Kerkorian, has decided to sell a large piece of his holdings in GM stock.

 

In a filing with the U.S. Securities Exchange Commission, Tracinda, Kerkorian's holding company, reported the Los Angeles billionaire was selling 14 million shares, or roughly one-fourth of his GM stake, to a third party via a private sale for $33 per share in a transaction valued at $462 million. The identity of the purchaser wasn’t disclosed in the Tracinda filings.

 

Several hedge funds have recently have acquired small stakes in GM. The deal will leave Kerkorian with about 7.4 percent of GM’s shares.

 

In a separate filing, Kerkorian disclosed that he will use the proceeds to offer $55 per share or $825 million for up to 15 million shares of MGM Mirage Inc. The twin filing suggested that Kerkorian is redeploying assets away from GM, lessening the chances that he will wage an all-out proxy fight with GM’s board of directors.

 

Kerkorian’s about-face comes almost exactly one year after GM announced plans to close 12 plants and eliminate 30,000 manufacturing jobs.

 

Kerkorian originally assembled his stake in GM during the winter and spring of 2005 at the urging of his automotive advisor Jerry York. Last month, York, who by then was a GM director, resigned from the GM board after it rejected a proposed partnership with Renault/Nissan. In his resignation letter, York said he was disappointed GM's board had not commissioned an independent study of the proposed alliance with Renault/Nissan. In June, the 89-year-old Kerkorian had personally lobbied Carlos Ghosn, Renault/Nissan chief executive officer, to pursue an alliance with GM, suggesting in a letter to GM’s board that it could benefit all three companies.

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