Reuters reports...
DETROIT -- Institutional Shareholder Services, which advises on proxy votes, said today it sees a growing chance that investor Kirk Kerkorian will challenge the board of General Motors in a proxy fight.Kerkorian, who owns a 9.9-percent stake in GM through his investment firm Tracinda Corp. had pushed for a GM tie-up with Renault SA and Nissan Motor Co. Ltd.When GM's board voted this month to walk away from that potential alliance, Kerkorian's financial advisor, Jerry York, resigned from the GM board and Tracinda said it had shelved plans to raise its stake in the automaker to about 12 percent.ISS said the tone of York's resignation letter to the GM board suggested that he was setting the stage for an eventual showdown with management.York criticized GM's now 11-member board for not sufficiently challenging management, saying discussion materials were not sent to directors far enough in advance of meetings and the board had erred in not bringing in its own outside advisors to evaluate the Renault-Nissan deal.GM countered that it had hired Goldman Sachs and Morgan Stanley to assess the potential benefits of the tie-up and that both had concluded that GM would have gained less than its rivals from an alliance.The company has also rejected York's criticism of its board oversight as baseless.ISS said the dispute seemed to foreshadow a proxy fight and suggest that York could now be soliciting support from other institutional investors since he has left the board."One of the first arguments dissidents who run proxy fights make is that the board has failed in its oversight of management," ISS said in a research note. "Mr. York's resignation letter is a roadmap of a potential line of argument Mr. Kerkorian may make to shareholders in the future."It added: "Mr. York is now free to test the waters by meeting with major GM shareholders to discern whether there would be support for such a fight."York has scheduled a speech later this month at an automotive conference organized by brokerage Gabelli & Co.The speech marks the first appearance by the former Chrysler and IBM executive before a group of investors and analysts since a January presentation in Detroit in which he detailed Kerkorian's reform agenda for GM.GM shares have gained about 65 percent since the start of the year as investors reacted to signs of progress in a restructuring, expected to reduce annual costs by $9 billion by the end of the year.
It's must seem like a nightmare to the GM board that this whole situation might not be over
and Kerkorvian might try to force the issue, once again my question here is what's his angle.
This man has plenty of money and has more than his hands full, why he may come back
with a counter move is still unclear.
J.
