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Activist investor Kerkorian exits Ford

It was hailed by fourth-generation chairman Bill Ford as a vote of confidence in Ford’s business plan, but activist investor Kirk Kerkorian’s dalliance with the car manufacturer has turned out to be all too brief after he admitted that he was looking to sell some or all of his stake.

Ford warmly introduced Kerkorian’s investment, via his Tracinda vehicle, at the company’s Annual Meeting of Shareholders in May this year. But less than six months in, the relationship has reached a dead end with Kerkorian saying he is taking his money out, at a loss of roughly $5 a share, to put it into the gaming industry.

This has ended a turbulent month for Detroit-based Ford, which has also had to replace its chief financial officer and seen the departure of two of its most experienced directors.

It also calls into question Bill Ford’s statement at the AGM in which he said that investors were still attracted by the long-term stability provided by the family’s involvement. This is clearly not the case with Kerkorian, who has a chequered history as an activist investor.

He bought a 10% stake in General Motors in 2006 before selling it within a year after failing to force GM into a three-way alliance with Nissan and Renault. He also made an unsuccessful $4.5 billion bid to acquire Chrysler in 2007.

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