Chrysler and Kerkorian Stop Fighting

02/12/96

Reuters reported that Chrysler and Kirk Kerkorian have stopped fighting. The corporation and the billionaire reached agreement about several key issues they have been fighting about and both sides have made concessions.

For his part, Kerkorian has agreed to end his bid to take over the corporation. Kerkorian, who has acquired roughly 14% of Chrysler, has agreed not to buy any more stock in Chrysler for the next five years. Chrysler appointed an officer form Kerkorian's Tracinda Corp. to their board (in spite of rejecting Kerkorian's first choice for the position). They also agreed to Kerkorian's biggest demand by announcing their intent to double their planned billion dollar stock buyback in 1996 and continue it in 1997 at the billion dollar level. Chrysler will fund the buybacks by selling their non-automotive assets, including their defense and rental car subsidiaries, and other non-essential assets.

Part of the agreement includes settling all lawsuits with Lee Iacocca, who joined Kerkorian in his takeover attempt a year ago. Kerkorian has paid Iacocca $32 million, Chrysler has paid him $21 million. Iacocca has withdrawn from the Kerkorian group, terminated all agreements with Kerkorian's Tracinda Corp, and entered a five-year standstill and a two-way non-disparaging agreement with Chrysler.

Paul Dever -- The Auto Channel