Return of the great adventurer

HOW to explain the phenomenon that is Kirk Kerkorian? What drives this son of an Armenian immigrant who, at the age of 77, has single-handedly sent one of the world's greatest business behemoths, the Chrysler Corporation, into a palpable tizzy with his quest if not to buy it then at least to control it? Greed might be an obvious answer, but that, surely, is not it.What then is it?

Fathoming the former Hollywood mogul and baron of the Las Vegas strip is made all the more difficult because of his obsession with privacy. He never attends public meetings and since being asked by a reporter 15 years ago about alleged mob ties to his business, he never gives interviews. Perhaps it was Lee Iacocca, the former chairman of Chrysler and close associate of Mr Kerkorian, who got closest to the truth when he said recently that the tycoon never rests because he wants to stay young.

Others who know Kerkorian testify to a drive that is exceptional for a septuagenarian. He still plays tennis daily, drives his own car and sports a perpetual tan. "He is young, that's a fact," says Patricia Glaser, a Los Angeles lawyer who has been a close friend and associate for many years. "And he is a businessman who right now is having a lot of fun." Ms Glaser describes a "wonderful and loyal friend", who is not at all like the oft-recycled image of a shy and unapproachable recluse and who is sometimes compared with an earlier icon of Las Vegas, Howard Hughes. "He is always straight with you," she says.

If wheeling and dealing is Kerkorian's secret elixir, then he is getting an especially good dose with his tangle with Chrysler. It began in April, when his Vegas-based investment corporation, Tracinda, made an astonishing $22.8bn (pounds 14.7bn) bid for the company, with Iacocca at his side as special adviser. Eventually, he was forced to withdraw after failing to persuade Wall Street of the offer's credibility. But last week, he was back in the ring after Tracinda recruited Jerome York, a former 14-year executive at Chrysler, from IBM. With York, Tracinda can now make a second run at the car maker.

"Frankly, I think he has been a little bored recently," ventures Peter Bart, the editor of Variety, who worked beneath Kerkorian at Metro-Goldwyn- Mayer in the 1980s. "He likes this kind of thing, It's an adventure to him." Mr Bart describes a man who operates by the seat of his pants, lunging for deals and sometimes showing little interest in the details. He recounts how Kerkorian once invited one of Hollywood's foremost figures on to his plane and impulsively suggested that the two of them buy the Rams, then an LA football team, for $60m. Is $60m right, the friend asked? "I just have a sense that that is the right number," came the reply. The Rams deal was one that did not happen.

After dropping out of what he once a called a "semi-reform" school for tearaways in east Los Angeles, Kerkor Kerkorian - his legal name - briefly flirted with amateur lightweight boxing, fighting under the name "Rifle Right" Kerkorian. In the Second World War, he served as a captain in Britain's Royal Air Force. When the fighting was over, he sold surplus war planes in North and South America before, in 1947, paying $60,000 for a single-aircraft charter service that ferried gamblers between Los Angeles and Las Vegas. He rapidly expanded the company, which he named Trans International Airlines and in 1968 sold it to Transamerica Corp for $104m.

By then, Kerkorian had embarked on his second passion: Vegas itself. An avid player at the craps table, he three times built what was then the world's largest hotel in Las Vegas. The first, the International, was opened in 1969 and sold two years later. In 1973, he opened the first MGM Grand, selling that finally to Bally's in 1986. Then only two years ago, he introduced his second MGM Grand, a 5,000-room monster with a theme park almost as large as Disneyland.

All the while, however, Kerkorian was extending his ambitions, primarily into Hollywood and the airline industry. In the 1960s and 1970s, he held a controlling interest in the now-defunct Western Airlines. He eventually sold back his stake in the carrier at a generous premium. And he made unsuccessful runs at TWA and Pan Am. His appetite for the former evaporated when it became clear that its prized routes to London were to be sold off to American Airlines.

It is Kerkorian's long stewardship of Metro-Goldwyn-Mayer, in which he bought a controlling stake in 1969 for $82m, that stirs most controversy and has arguably most tarnished his reputation. Many have not forgiven him for gutting the studio, to which he added United Artists in 1981. One of his greatest critics has been Bart of Variety, who chronicled MGM's demise in a book, Fade Out. In it, he criticises Kerkorian as a poor manager, rarely recognising those who worked for him and unwilling to confront difficult issues or to sack those he should have. Now he more or less forgives the tycoon. "He trusted an inner circle of lawyers who just gave him terrible advice. He kept hiring the wrong people." Only rarely did Kerkorian offer any creative advice.

In 1986, he sold the studio to Ted Turner of Turner Broadcasting for $1.5bn only to buy it back five months later, minus its film archives, for $480m. Finally in 1990, he offloaded what remained of MGM to Pathe. The studio subsequently folded.

It was also in 1990 that Kerkorian turned his sights on Chrysler, America's number three vehicle-maker, spending $272m to take a 9.8 per cent stake in the company. In November last year, he sought permission to increase his holding to 15 per cent and made public his concern that Iacocca's successor as chief executive, Bob Eaton, was not doing enough to return new-found profits to shareholders.

From then on, Kerkorian has held the Chrysler board in his thrall. Eaton attempted to appease him by announcing a $1bn buyback of company stocks. Undeterred, Kerkorian made his bid in April, when Chrysler shares had dipped below $40. On the news this week of Tracinda hiring York, Eaton was forced to move once again, revealing that he will double to $2bn the share buyback programme initiated last year.

If the low valuation of Chrysler's shares was Kerkorian's principle concern when he first made his bid, he should now be more or less satisfied. Last week, the company's shares were trading healthily well over $50. It may be that Kerkorian has abandoned any hope of buying the corporation. Few believe that he is done with Eaton, however. The next battle may be to win control of the Chrysler board through a proxy fight. If so, he may be able to position York to take the chief executive's seat from under Eaton. Like the best of gamblers, Kerkorian is keeping his cards close to his chest. But few imagine that he is done with Chrysler. It is just the kind of game he relishes. And it keeps the wrinkles at bay.