ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, February 9, 1996 TAG: 9602090074
SECTION: BUSINESS PAGE: B8 EDITION: METRO
DATELINE: NEW YORK
SOURCE: Associated Press
Billionaire investor Kirk Kerkorian made peace with Chrysler Corp. on Thursday, ending one of the most acrimonious corporate takeover fights since the 1980s merger heyday.
Chrysler agreed to buy more of its own stock and distribute excess cash to investors. Both moves could increase Chrysler's stock price - a major goal of Kerkorian's aborted attempt to take over the No. 3 automaker.
Chrysler also appointed a lieutenant in Kerkorian's Tracinda Corp. to its board, but rejected Kerkorian's first candidate - Jerome York, a former Chrysler chief financial officer.
Kerkorian, a wealthy gambling entrepreneur who has increased his stake in Chrysler to roughly 14 percent, agreed not to buy any more stock in the company for five years.
The agreement, announced after a Chrysler board meeting, effectively ended a prolonged and bitter battle between Chrysler and Kerkorian, who at one point a year ago tried to buy the company for $23 billion and enlisted the help of former Chrysler boss Lee Iacocca in the effort.
Kerkorian retreated from his takeover tactic but still has been pushing for the company to take steps that would increase its stock price and make Kerkorian's stake worth more.
``We are very pleased that we could resolve these issues, which will allow the Chrysler team to remain focused on building value for all of our shareholders and on building high-value cars and trucks for consumers,'' said Chrysler Chairman and CEO Robert J. Eaton.
Chrysler also settled lawsuits between it and Iacocca, who agreed to sever his ties to Tracinda. Iacocca's Chrysler stock options were terminated by Chrysler when Kerkorian launched his hostile bid for the company.
As part of the settlement, Iacocca has been paid $32 million to partly compensate for the canceled options, which Chrysler said were worth $53 million.
James D. Aljian, a longtime Tracinda executive and chairman of Kerkorian's charity, was named to Chrysler's board.
Aljian's appointment was a compromise with Kerkorian.
Kerkorian had tried to name York, a fierce cost-cutter, to Chrysler's board. The attempt was rebuffed Wednesday when the automaker named former mutual fund manager John Neff.
Chrysler said it would double its stock buyback program to $2 billion this year and buy another $1 billion worth in 1997.
The announcement came in the late afternoon shortly before the stock market closed. Chrysler shares ended at $56.75, down $1.621/2, on the New York Stock Exchange.
LENGTH: Medium: 58 lines ILLUSTRATION: PHOTO: AP file. Kirk Kerkorian\Agrees not to buy up moreby CNBChrysler shares for five years. color.