Kerkorian Letter Suggests Deal Dead

Kirk Kerkorian’s letter challenging Chrysler Corp. to let shareholders vote on the gambling mogul’s takeover proposal looks like a signal that the deal is dead.

“It’s a clear indication that the financing’s just not there,” said Michael H. Bradley, a University of Michigan law and finance professor who specializes in mergers, acquisitions and corporate governance.

Investors appeared to read the same message. Chrysler stock dropped quickly as trading opened Wednesday. Shares in the No. 3 automaker closed at $41.625, down $2.50, with more than 9 million shares traded.

“That’s just consistent with the idea (Kerkorian’s letter) is clearly a concession that the deal’s not going to be done,” Bradley said.

The stock price rose $9.50, to $48.75, on April 12, the day Kerkorian announced his $55-a-share, $22.8 billion proposal, the biggest corporate takeover gambit since the 1980s mergers heyday.