Kerkorian Ford Takeover Offer Oversubscribed

DETROIT, June 10; 2008; David Bailey writing for Reuters reported that Ford Motor Co Stockholders overwhelmingly sought to take up billionaire investor Kirk Kerkorian's offer to buy their shares at a large premium to the current stock price, his investment vehicle said on Tuesday.

The stockholders offered to sell Kerkorian 1.02 billionshares -- or nearly half of the total outstanding -- for the struggling No. 2 U.S.-based automaker, Kerkorian's Tracinda Corp said in a statement.

Ford warned in May that it would not meet its long-standing goal of returning to profitability in 2009. The shares closed at $6.36 Monday on the New York Stock Exchange, or more than $2 below the $8.50 tender offer price.

Investor interest in the tender was "understandable" given the significant premium over the current stock price, Ford said in a statement.

"The Ford team remains focused on executing our plan to transform Ford into a lean global enterprise delivering profitable growth," Ford said.

Kerkorian said in April he had bought a 100-million-share stake in Ford and planned the tender offer. He elected to proceed with the offer even after Ford's profit warning.

With the $170 million purchase of shares under the tender offer, Kerkorian will be acquiring about 1.97 percent of the total shares offered and will raise his stake in Ford to more than 5 percent overall.

Kerkorian has long-standing ties to Detroit, holding a nearly 10 percent stake in General Motors Corp and making an unsuccessful bid for Chrysler in 2007.

He also offered to buy the luxury Jaguar and Land Rover brands from Ford last year.

He expressed support for Ford's turnaround efforts and management team led by Chief Executive Alan Mulally when he announced his plans for the tender offer.

Tracinda's 100 million shares were acquired at an average price of $6.91 in April, putting that stake underwater.

The Ford family controls about 40 percent of the voting power in the automaker because of a separate class of shares established when it went public in 1956.

Ford has said it must restructure its business to account for a permanent shift in consumer demand toward cars and crossovers, and away from the large trucks and SUVs that had been a staple of profits in past years.

U.S. auto sales have continued to slump amid the slowdown in the U.S. economy and consumers have abandoned the larger vehicles under the steep rise in gasoline prices to about $4 per gallon nationwide.

In May, Ford's F-Series trucks were outsold on a monthly basis for the first time in 17 years, by four car models.

Additional reporting for Reuters by Soyoung Kim; Editing by Maureen Bavdek