Defensive buy-up by Chrysler
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Your support makes all the difference.Chrysler Motor Company is strengthening its defences against a possible fresh bid attack by tycoon Kirk Kerkorian, doubling its stock buy-back programme to $2bn, writes David Usborne in New York.
America's number three car maker is once again on alert to avert a hostile takeover, following news earlier this week that Mr Kerkorian's Tracinda Corporation had hired Jerome York, a former senior executive at Chrysler. Mr Kerkorian, who holds 13.6 per cent of Chrysler's stock, launched an unsuccessful run at the company earlier this year which he was forced to abandon after failing to raise sufficient funds. But he did not formally concede defeat, and is now thought to be plotting a second campaign.
Chrysler said at the end of last year that it would begin buying back $1bn of its outstanding shares. By promising to repurchase double that amount by the end of 1996, it hopes to raise the share price of the company, making a takeover more expensive for Mr Kerkorian.
"We are on track with our current programme," Chrysler chairman Bob Eaton declared yesterday. "We've consistently said that we would return to our shareholders anything in excess of the cash we believe we need on hand to run the business."
There were separate reports, meanwhile, that the Chrysler board was considering giving the green light to its former chairman, Lee Iacocca, to exercise his options to buy 1.55 million shares in the company. If sold at current market levels, they would be worth about $44.4m.The Wall Street Journal reports that Mr Iacocca will be allowed to exercise the options only if he severs his relations with Mr Kerkorian. In his first bid for Chrysler, Mr Kerkorian boasted that he had Mr Iacocca at his side as his adviser.
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