Chrysler relaxes on Kerkorian threat
The company announced only last week that its top executives would be shuttling around the country to lobby for support in trying to repel the Kerkorian bid, which still remains unfinanced. Plans were also made to fly big investors to Michigan for a special summit at Chrysler headquarters.
The cancellation comes amid unconfirmed reports that Chrysler is preparing to buy back the near 10 per cent stake held by Mr Kerkorian's Tricinda company. At current market prices that would cost the car giant almost $1bn (£600m).
Confidence is reportedly rising within Chrysler that the Kerkorian bid, made in association with Lee Iacocca, the former Chrysler chief executive, has become less of a threat since it was unveiled a month ago. As well as failing to find financing for it, Mr Kerkorian also lost his principal Wall Street investment bank advisor on the putative deal, Bear Stearns.
Poor sales results for the first quarter have also bolstered Chrysler's contention that it would be wrong to plunder the company's $7.3bn cash cushion, as proposed by Mr Kerkorian in his takeover plan. Chrysler reported that car and light truck sales were down 18.1 per cent.
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