Kerkorian ups GM stake to 9.9 percent

CHICAGO January 25, 2006; Reuters reported that billionaire investor Kirk Kerkorian has increased his stake in General Motors Corp. to 9.9 percent from 7.8 percent, according to a regulatory filing on Wednesday.

News of the move helped send GM's shares higher in after-hours electronic trading.

Kerkorian's Tracinda Corp., over which he has effective control, acquired 5 million shares on the open market on January 23 at an average price of $21.40 a share and an additional 7 million shares in a private transaction expected to settle on January 27, according to the filing with the U.S. Securities and Exchange Commission.

Tracinda spent a total of about $262.8 million acquiring the shares, the filing said.

The purchase by Kerkorian, a dissident GM shareholder who has called for sweeping change at the automaker, comes two weeks after his key adviser suggested Tracinda might be prepared to organize a fight for control of GM's boardroom.

Kerkorian has been trying, so far unsuccessfully, to get Tracinda adviser Jerome York a seat on the board.

Speaking to Reuters at the Detroit Auto Show earlier this month, York said Tracinda might mount its own slate of directors in its bid to force change at the world's largest automaker.

"The reality is we have a whole menu of options," York said in an interview with Reuters following his speech to industry analysts on the sidelines of the North American International Auto Show in Detroit.

"We are continuously evaluating the situation regarding what is going on with GM," York said. "I don't mean every two months or something, I mean on a day-by-day, week-by-week basis."