DETROIT -- Investors in troubled General Motors Corp. were betting yesterday that 87-year-old billionaire Kirk Kerkorian's surprise proposal to acquire a large stake in the company could be a catalyst for better times at the world's largest automaker.
GM shares soared more than 18 percent after Kerkorian's Tracinda Corp. offered to pay almost $870 million for a nearly 5 percent stake. That would boost Tracinda's holdings to about 9 percent and make Kerkorian one of GM's largest shareholders.
GM shares fell to a 10-year low in April after the company reported a $1.1 billion loss for the first quarter. Its sales have slumped in recent months as gasoline prices marched higher.
Tracinda officials said Kerkorian would have no comment beyond the statement released early in the day saying the proposed buy was for investment only. But his motives prompted speculation on a variety of scenarios, including that he might desire a controlling stake in the automaker.
Beverly Hills, Calif.-based Tracinda is the majority owner of casino and hotel operator MGM Mirage Inc.
Tracinda said it was willing to buy up to 28 million GM shares for $31 each in cash, an 11.6 percent premium over GM's closing stock price Tuesday.
GM said in a statement late yesterday it ''typically does not express a view on specific investor activity," but added that ''GM's board and management are committed to enhancing shareholder value for all of our investors."