Rumors or Reality
It’s rumored that the deal between Nissan/Renault and General Motors won’t go through. Some have said that it was only due diligence on Rick Wagoner’s part, to appease Kirk Kerkorian, GM’s largest shareholder. The fear, some say, was that Tracinda, Kerkorian’s holding company, would sell all their stock and send GMs prices plummeting.
According to General Motors, regarding Tracindas filing of 13D (Reg. FD compliance TBD), “Tracinda Corporation advised us last night that it would be updating it’s SEC filings to reflect an interest in acquiring additional shares of GM stock. As Tracinda noted in it’s SEC filing this morning, an increase in it’s investment to 10% or more of GMs common stock could be subject to the prior satisfaction of federal and state banking regulations because GM owns interests in various regulated financial institutions. We are reviewing the filing made by Tracinda and have no further comment at this time.”
The filing by Tracinda read as follows:
Item 4. Purpose of the Transaction
When Tracinda first purchased more than five percent of GM shares, it was required to file a 13-D. Each time it changes it’s an investment or announces an intention to change, it needs to file an amendment to the original 13-D and/or a 13-D/A.
Item 4 of the Schedule 13D is hereby amended to add the following information:
On September 28, 2006, Tracinda sent a letter to G. Richard Wagoner, Jr., Chairman of the Board of Directors of General Motors, in which Tracinda indicated that consistent with Amendment No. 6 to the Schedule 13D, it is interested in acquiring approximately six million shares of General Motors common stock and may consider acquiring up to an additional six million shares. A copy of the letter to Mr. Wagoner is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Because General Motors owns interests in various insurance, banking, trust, and industrial loan companies, an acquisition that would result in Tracinda beneficially owning 10% or more of the common stock of General Motors could be subject to the prior satisfaction of applicable federal regulatory requirements and approvals or non-objection of various federal bank regulatory agencies and state banking and insurance regulators.
Among other things, an investment in 10% or more of the common stock of General Motors could require Tracinda to obtain prior approval from the Office of Thrift Supervision (OTS) of a rebuttal of a determination that it had acquired control of General Motors and it’s federal savings bank subsidiary and approval of similar rebuttals of control from other federal regulatory agencies. A rebuttal of control generally requires an acquirer to enter into an agreement with the OTS that is intended to require the investor to act as a passive investor as a condition to obtaining permission to proceed with the investment.
Tracinda intends to engage in discussions with the relevant regulatory authorities in order to seek relief from certain provisions of the customary form of rebuttal of the control agreement. Howe’ver, there can be no assurance that Tracinda will be able to obtain any such relief, to obtain approvals from regulators under conditions that would be acceptable to Tracinda or otherwise to satisfy the applicable requirements, nor as to the timing of any such approvals.
Tracinda continues to believe that a strong opportunity exists in a potential alliance between General Motors, Renault and Nissan and that there should be strong General Motors Board involvement in the analysis of such a potential alliance, including the utilization of independent advisors.
September 28, 2006
G. Richard Wagoner, Jr.,
Chairman and Chief Executive Officer
General Motors Corporation
300 Renaissance Center
Detroit, Michigan 48265
Dear Mr. Wagoner:
In keeping with Tracindas desire to have an open relationship with General Motors, we want to let you know that, consistent with statements included in our Schedule 13D filings, Tracinda is interested in acquiring approximately six million shares of GMs common stock in the open market and may consider acquiring up to an additional six million shares.
As you are aware, because GM owns an interest in various insurance, banking, trust, and industrial loan companies, Tracinda could be required to satisfy various state and federal rules and regulations prior to any such acquisition, since it would result in Tracinda owning 10% or more of GMs outstanding common stock.
We are seeking the cooperation and support of the Company and it’s management in connection with these filings and any related proceedings, as we believe additional investment by Tracinda in GM would be viewed positively by investors, and your support will maximize the likelihood of obtaining regulatory approval.
We welcome the opportunity to discuss this matter further with you if you so desire.