Kerkorian hires former IBM adviser for GM offer

Kirk Kerkorian has recruited Jerry York, the former Chrysler and IBM chief financial officer, to advise the 87-year-old billionaire on his $878 million (€683.7 million) offer for a big stake in General Motors.

The move is likely to re-awaken speculation that Mr Kerkorian is considering pushing for change at GM, the world's largest carmaker. Mr York was poached from IBM to be the numbers man for Mr Kerkorian's unsuccessful bid for Chrysler, GM's smaller rival, 10 years ago.

However, Mr Kerkorian, through Tracinda, his investment company, said the shares would be held purely for investment and denied any "present intent" to influence GM. Shares in GM jumped 18 per cent last week when Mr Kerkorian revealed he wanted to double his previously secret stake to 9 per cent through a tender offer. The shares lost much of their gains later after the company was downgraded to junk bond status.

In a regulatory filing, Tracinda said Mr York, acting as a consultant, had called Bob Lutz, vice-chairman of GM, and been called by John Devine, chief financial officer, before the company announced its interest in the carmaker's shares. GM declined to comment on the content of what it described as "courtesy" calls.

Financial analysts and GM officials are sceptical of Mr Kerkorian's intent, questioning why he would invest through a global tender offer and pointing to his reputation as a corporate raider. After the tender he would be GM's third-biggest shareholder.

Investors initially bet that Mr Kerkorian would push to give shareholders access to GM's $20 billion to $60 billion cash pile depending on how it is measured which is far higher than the company's market value. But Scott Sprinzen, motor analyst at Standard & Poor's, which downgraded GM's $292 billion of debt to junk status on Thursday, said it was "naive" to expect any handout of cash needed to cover the company's massive liabilities.

Tracinda said in the filing it had no "current plans, proposals or negotiations" for a merger of GM, sale of its assets, a change to the dividend or members of the board, or the purchase by anyone else of extra GM shares.

Mr York has a reputation as a turnaround specialist, and now sits on the boards of several companies, including Tyco, Exide and Apple. - (Financial Times Service)