Billionaire investor Kirk Kerkorian could seize control of General Motors easily with help from Nissan and Renault, analysts have told The Associated Press.
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Kerkorian’s Tracinda Corp owns 9.9% of GM’s shares and, if Renault and Nissan Motor each buy stakes of up to 10%, they collectively would be the largest shareholder and could have their way with the icon of American industry, analysts told AP, adding that, with such control, the disgruntled Kerkorian could oust GM chairman and CEO Rick Wagoner and replace him with Carlos Ghosn, the chief executive of both Renault and Nissan.
Gerald Meyers, the former chairman of American Motors who now teaches at the University of Michigan, reportedly said that GM is a closely held company, with six entities controlling more than 60% of its common stock, making it relatively easy to collect 30% or 32% of the shares, and. with about one-third of the shares, no one else would be large enough to stand in the way.
“Everybody else is a little guy, and when you talk, everybody else listens,” he told AP, adding: “To fight off somebody that’s that large, relatively speaking, you have to go out on a broad front and persuade the little shareholders that you’re right and they’re wrong. That takes a lot of effort, a lot of time and a lot of money.”
Analysts suggested it was likely other institutional shareholders would join Kerkorian, giving him control of GM with only a minority investment, AP reported.
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By GlobalDataKerkorian spokeswoman Carrie Bloom would tell AP only that Nissan and Renault are interested in purchasing a minority interest in GM and would not comment when asked about replacing management or taking control of the company.
Spokesmen for GM’s two largest minority shareholders, State Street Bank and Trust Co. of Boston and Capital Research and Management Co. of Los Angeles, reportedly said they could not comment on whether they would join Kerkorian.
David Healy, an industry analyst with New York-based Burnham Securities, told The Associated Press Kerkorian is merely using news of the potential alliance to push up GM’s stock price. He reportedly called the prospect of taking control of the company preposterous but cautioned that GM still must pay attention to Kerkorian because of his success as a corporate raider and because he has a representative, Jerome York, on GM’s board.
Healy also called Ghosn a miracle worker who rescued Nissan from the grave after it was acquired by Renault. Ghosn, he said, has done it all at Renault and Nissan and is getting bored and “looking for new fields to conquer.”
“He’s one of the few that’s actually executed a turnaround after an acquisition,” another analyst said of Ghosn, according to the report. “That’s a very hard commodity to come by.”
