Tracinda's 18-Year Attraction to Big Three

Chrysler 1990: Kirk Kerkorian's Tracinda Corp. acquires 9.9% of Chrysler Corp. 1995: Kerkorian, joined by retired Chrysler Chairman Lee Iacocca, proposes taking Chrysler private. Ups stake to 14%, but proposal fails. Shortly after, Jerry York joins Kerkorian as Tracinda vice chairman. 1998: Chrysler goes on the block. Tracinda and Iacocca once again try takeover but lack adequate outside financing.

David C. Smith, Correspondent

September 1, 2008

2 Min Read
WardsAuto logo

Chrysler

  • 1990: Kirk Kerkorian's Tracinda Corp. acquires 9.9% of Chrysler Corp.

  • 1995: Kerkorian, joined by retired Chrysler Chairman Lee Iacocca, proposes taking Chrysler private. Ups stake to 14%, but proposal fails. Shortly after, Jerry York joins Kerkorian as Tracinda vice chairman.

  • 1998: Chrysler goes on the block. Tracinda and Iacocca once again try takeover but lack adequate outside financing. DaimlerBenz AG's $35 billion offer for “merger of equals” revealed in August is winner, and Chrysler becomes division of renamed DaimlerChrysler AG. Tracinda reportedly makes $3 billion on its Chrysler shares.

  • 2007: DaimlerChrysler puts ailing Chrysler on the block in February. In April, Tracinda offers $4.5 billion in cash for Chrysler, proposing to take it private with major equity positions for management and the UAW.

  • Others vying for the company include Magna Internatonal Inc. and, separately, private-equity firms Ripplewood Holdings Ltd., The Blackstone Group and Cerberus Capital Management LP. Cerberus's $7.4 billion bid wins, and on May 14 it takes over with 80.1% control. Daimler retains remainder. Chrysler goes private, is renamed Chrysler LLC.

General Motors

  • 2005: York launches GM study, and in December Tracinda reveals ownership of 12 million, or 9.9%, of GM's shares. In January 2006, York gives a speech urging GM to take a “clean sheet,” drop Saab and Hummer, cut $2 dividend in half and make other painful moves. York joins GM's board on Feb 7.

  • On June 30, 2006, Renault SA and partner Nissan Motor Co. Ltd., both headed by CEO Carlos Ghosn, offer to buy a 20% stake in GM and, tying in with Tracinda, proposes teaming with GM in a 3-way merger.

  • GM mulls the proposal but in October 2006 votes against it. York abstains, then departs GM board. Kerkorian subsequently sells his GM shares.

Ford

  • 2007: On June 19, York submits Tracinda's bid for Ford's Jaguar and Land Rover operations, but a week later Ford informs Tracinda it is excluded from the bidding (subsequently won in 2008 by India's Tata Motors Ltd.).

  • 2008: On April 2, Tracinda begins buying Ford shares at $6.10 each and continues buying until April 21, when stock reaches $7.58, accumulating a 5.6% stake. York informs Ford on April 27 that Tracinda has purchased 100 million shares. On May 9, Tracinda reveals an offer for 20 million Ford shares at $8.50 each and, after investing a total of $800 million, raises its total ownership to 6.5%.

  • Tracinda, which says it may buy more shares or offer to provide Ford additional capital, says it's investing in Ford “because we believe Ford is an attractive investment.”

About the Author(s)

Subscribe to a WardsAuto newsletter today!
Get the latest automotive news delivered daily or weekly. With 5 newsletters to choose from, each curated by our Editors, you can decide what matters to you most.