updated 5/9/2005 9:55:22 AM ET 2005-05-09T13:55:22

Billionaire Kirk Kerkorian's investment firm Tracinda Corp. said Monday it has launched its previously-announced offer of nearly $870 million to buy up to 28 million General Motors Corp. shares at $31 per share.

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The offer for the equivalent of nearly 5 percent of GM shares is scheduled to expire on June 7, unless extended.

If Tracinda does purchase all 28 million shares, Kerkorian will double his stake in the world's largest automaker to 50 million shares, or 8.84 percent.

In a filing with the Securities and Exchange Commission Monday, Tracinda said that in April, the company began purchasing GM shares in the open market, believing that the recent trading prices of the shares did not reflect the full value of the company.

Tracinda and an associate purchased a total of 22 million shares, or about 3.9 percent of GM shares, in the open market through May 3.

Last week, Kerkorian's announcement that he planned to more than double his GM holdings sent the stock soaring more than 18 percent. GM shares had fallen to a 10-year low in April after the company reported a $1.1 billion loss for the first quarter. Although the Kerkorian news significantly boosted shares, the stock tumbled about 6 percent the next day, after Standard & Poor's downgraded GM's credit rating to "junk" status.

In the filing, Tracinda reiterated that it is acquiring the GM shares for investment purposes only, and does not presently intend to acquire or influence control over General Motors' business.

Beverly Hills, California-based Tracinda is the majority owner of casino and hotel operator MGM Mirage Inc. It was the largest shareholder in Chrysler Corp. when the automaker merged with DaimlerBenz in 1998.

NYSE-listed shares of General Motors fell 25 cents to $30.51 in premarket activity.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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