Ford's largest non-family investor exits at a loss

30 December 2008

Billionaire investor, Kirk Kerkorian, the largest investor in Ford Motors outside the Ford family, has sold all of his remaining shares of Ford Motors where he once held 6.3-per cent stake, losing millions of dollars in the now devalued company.

The billionaire stuck to his October plans when he had announced that he would exit from Ford Motors and focus on his other investments like gambling, energy and hotels especially the Las Vegas based entertainment company, MGM Mirage. (See: Kerkorian loses faith; starts selling Ford stock) 

Kerkorian's exit from Ford has made him lose millions, as the activist investor had a mixed bag of records in investments in all the three Detroit automakers as well as his failed bid to acquire Chrysler when he made a $4.58-billion bid, but lost out to private equity firm Cerberus Capital Management, which acquired 80 per cent of the company for $7.4 billion last year.

He held a 9.9-per cent stake in General Motors at one time but sold that stake in 2006, when GM rejected his proposed tie-up with Nissan Motor Co and Renault.

In April this year Kerkorian's Beverly Hills-based investment arm Tracinda Corp  made a cash tender offer for up to 20 million shares of Ford at $8.50 per share, over and above the earlier 100 million shares or 4.7 per cent that Tracinda earlier bought at an average price of $6.91. (See: Billionaire Kerkorian to increase stake in Ford; offers premium for 20 million shares)

At that time Tracinda said the automaker under CEO Alan Mulally is ''starting to achieve highly meaningful traction in its turnaround efforts.'' It also applauded the company's results where it posted a $100 million first-quarter profit in April ''despite the difficult US economic environment.''