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May 23, 2008

US: Ford board “neutral” on Kerkorian share bid

Ford on Thursday said its board of directors had decided the automaker would “express no opinion and is neutral” with respect to billionaire investor Kirk Kerkorian's Tracinda Corporation’s tender offer to purchase up to 20m shares of Ford’s common stock at a price of US$8.50 per share, net to the seller in cash.

Ford on Thursday said its board of directors had decided the automaker would “express no opinion and is neutral” with respect to billionaire investor Kirk Kerkorian’s Tracinda Corporation’s tender offer to purchase up to 20m shares of Ford’s common stock at a price of US$8.50 per share, net to the seller in cash.

Ford said in a statement the shares sought in the tender offer represent just less than 1% of its outstanding common stock.

According to the filing by Tracinda on 9 May, Tracinda’s tender offer will expire on 9 June at 5pm EST, unless the offer is extended, Ford said.

According to the Associated Press (AP), the board’s unanimous decision was reached following a special meeting on Tuesday that also included an update on its business plan and the US economy.

“The corporation has not made a determination as to whether the offer is fair to, or in the best interests of, its stockholders and is not making a recommendation regarding whether … stockholders should participate,” Ford reportedly said in a filing with the US Securities Exchange Commission (SEC).

“The corporation urges each stockholder to make its own decision regarding the offer.”

According to AP, Ford said in its filing that the decision was made in part because Tracinda seeks a relatively small percentage of shares and also because Tracinda has said it believes Ford is an attractive investment and doesn’t currently intend to acquire or influence control over Ford’s business.

The filing also said the offer “would not be expected to interfere with the corporation’s ability to execute its business plan and strategies.”

AP added that Kerkorian’s Tracinda on 9 May launched his previously announced $170m cash offer to buy the 20 million shares. The investor had earlier bought 100m shares in Ford without notice.

Ford’s board earlier had advised its stockholders to “take no action at this time” while it considered Tracinda’s offer, the news agency noted.

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