Kerkorian said to bail out of GM

NEW YORK (CNNMoney.com) -- Billionaire investor Kirk Kerkorian has unloaded all his General Motors stock, according to a published report Friday, after he disclosed the sale of a 14-million-share bloc of the No. 1 automaker the day before.

Shares of GM (up $0.11 to $29.34, Charts), which tumbled immediately after the SEC filing Thursday, have rebounded and were little changed in mid-afternoon trading.

Kirk Kerkorian

Kerkorian, who recently became GM's largest individual investor with a 9.9 percent stake, sold his last 28 million shares Thursday, according to the Wall Street Journal, which cited a person close to the matter.

On Friday, Bank of America Corp. (down $0.51 to $53.34, Charts) said it bought 28 million shares of GM on Thursday, roughly equal to Kerkorian's stake. A Bank of America spokeswoman confirmed the bank bought the shares but declined to identify the seller.

The paper said that the exit meant one less threat to the job of GM's CEO Rick Wagoner, who Kerkorian had criticized for addressing deep-seeded money problems too slowly.

The Thursday filing by Tracinda, Kerkorian's investment firm, said it had sold 14 million shares for $28.75 each Tuesday, which was about 4 percent below the stock's low for the day. It's also 13 percent below the price of his previous sale of 14 million shares, revealed in a Nov. 22 filing, and unlike his previous sale is for less than the average $30.22 a share he had paid for his 56 million-share stake.

Shares of GM have tumbled about 19 percent since Nov. 17, just before Kerkorian started dumping shares. But it's still the best performer of the 30 stocks in the Dow industrials this year, up about 50 percent year-to-date.

Kerkorian's filing did not give any reason for the sale, and a spokeswoman said he had no comment beyond the filing.

On Nov. 22, the day the previous sale was disclosed, Kerkorian filed a tender offer to increase his stake in casino operator MGM Mirage (Charts), of which he was already the majority shareholder.

He offered what was then a 12 percent premium to buy an additional 15 million shares, an offer that would cost him $825 million. The two GM sales announced this month are worth about $865 million.

GM spokeswoman Gina Proia had limited comment on the filing, saying only, "It's our practice not to speculate on the motivations, actions or potential actions of shareholders."

Kerkorian has been critical of GM management for some time, even as his filings spoke of a desire to increase his holdings. He battled with management of GM, pushing it to join an alliance with Japanese automaker Nissan (Charts) and French automaker Renault, which already have cross-ownership of each other's shares.

After holding almost three months of talks, GM management pulled out of the discussions, saying the automaker would have to be compensated for joining such an alliance.

The move brought criticism from Kerkorian and the resignation of Kerkorian adviser, Jerry York, from the GM board. York, in a letter to GM Chairman and CEO Rick Wagoner, said he had "grave reservations concerning the ability of the company's current business model to successfully compete with those of Asian producers."

Just before the Kerkorian disclosure Thursday, GM said it completed its previously announced sale of 51 percent of its General Motors Acceptance Corp. finance unit to a group of buyers led by Cerberus FIM Investors. GM expects the deal to provide about $14 billion in net cash proceeds over three years. But it will also remove a significant source of income for the struggling automaker.

GM, Ford (Charts) and the Chrysler Group unit of DaimlerChrysler (Charts) are all losing money on their core North American automotive operations, and have been losing U.S. market share to Japanese competitors such as Toyota Motor (Charts), as well as Korean and some European automakers.

--from staff and wire reports

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