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Kerkorian's Ford tender offer nets 826M shares

/ Source: The Associated Press

Billionaire investor Kirk Kerkorian's Tracinda Corp. said Friday its tender offer for Ford Motor Co. shares garnered 826 million shares from investors in the automaker.

Tracinda spokesman Tom Johnson said the final tabulation fell short of the 1 billion shares — nearly half of Ford's outstanding stock — originally pledged in response to its tender offer of $8.50 a share because some shares that had been promised did not come in within three business days of Monday's deadline. Tracinda will buy 20 million shares for about $170 million.

When Tracinda launched the cash tender offer on May 9 for the additional shares, it offered a slight premium to the stock's May 8 closing price of $8.20.

Tracinda will buy 2.4 percent of the tendered shares.

Ford's stock price has slid in recent weeks amid record-high gasoline prices, a sluggish economy and the Dearborn company's announcement that it no longer expects to return to profitability by 2009. The company is cutting production in North America for the rest of this year.

The Ford family owns 3 percent of the company's shares but has 40 percent voting rights through a special class of stock, insulating the automaker from a takeover.

Tracinda has expressed confidence in Ford's overall strategy, but Jerry York, a top Kerkorian adviser and former Chrysler chief financial officer, has suggested Ford should sell its Mercury and Volvo brands. Ford has defended its handling of the brands.

Tracinda began accumulating 100 million Ford shares, or 4.7 percent of the outstanding stock, on April 2 at an average cost of $6.91 per share, meaning Kerkorian has lost money on his investment thus far.

Ford's board of directors said it was neutral and would express no opinion about the offer.