FINANCIERS: Beverly Hills Meets Motown

• Share

Megarich financier Kirk Kerkorian knows how to make a fortune in the glitter mills of Las Vegas and Los Angeles, but can he do it in gritty Detroit? Last week Chrysler said the Beverly Hills investor had accumulated more than 9% of the troubled automaker's stock at an estimated cost of $250 million. Kerkorian met with Chrysler chairman Lee Iacocca earlier this month and professed support for the company's management but refused to sign a "standstill" agreement to stop increasing his stake, a Chrysler spokesman disclosed. Girding for a possible takeover bid, Chrysler has strengthened its poison-pill defense plan, which will allow current stockholders to buy shares at below- market prices if any investor acquires a stake of 10% or more.

Kerkorian, 73, collected $1.3 billion from the sale last month of his majority stake in MGM/UA Communications. Chrysler, which suffered a $214 million loss in the third quarter, must have looked like a bargain. Its stock price has fallen 40% in the past year, to 12 1/4. Even so, Kerkorian's strategy remains a mystery, since Chrysler's share of the auto market is weakening and the automaker's assets might be difficult to sell piecemeal.