The Spokesman-Review Newspaper
The Spokesman-Review Newspaper The Spokesman-Review
Spokane, Washington  Est. May 19, 1883
Current Temperature
44°F
Current Conditions
Overcast clouds
View complete weather report

Color Scheme

Subscribe now

Chrysler Takeover Bid Fuels Rally

Associated Press

Stocks sputtered higher on Wednesday, kicked into gear by a surprise takeover bid for Chrysler Corp.

The Dow Jones industrial average nearly made back the 11 points it lost on Tuesday, closing up 10.73 at 4,197.81.

Advancing issues edged out decliners by 1,180 to 1,001 on the New York Stock Exchange. Big Board volume was moderately heavy at 327.83 million shares as of 4 p.m., up from 309.71 million on Tuesday.

Chrysler shares shot up more than 13 points in early trading after an investor group including Kirk Kerkorian and Lee Iacocca, Chrysler’s former chairman, offered to buy the 90 percent of Chrysler that Kerkorian does not already own.

At $55 per share, the cash offer values the company at $22.8 billion. It would be the biggest U.S. corporate acquisition since the $25 billion takeover of RJR Nabisco Inc. six years ago.

Chrysler shares backed off at the end of the day, closing up 9 at 48. That was significantly below Kerkorian’s per-share price, an indication that investors are skeptical that Kerkorian’s bid will go through as it stands.

Some of the stocks that moved substantially or traded heavily Wednesday:

NYSE

Chrysler rose 9 5/8 to 48 7/8.

Ford rose 7/8 to 27 5/8.

General Motors rose 1/4 to 44 3/8.

Chrysler received a surprise takeover bid from Kirk Kerkorian, its largest shareholder. Kerkorian’s Tracinda investment company offered to buy the 90 percent of Chrysler that it does not already own for $55 per share, valuing the company at $22.8 billion. Kerkorian’s offer pushed up the shares of Ford and GM, offsetting the potentially negative affects of an earlier move by Chrysler and Ford to lower their 1995 forecasts for U.S. sales of light vehicles.

Boeing rose 2 to 55 7/8.

UAL rose 3 3/8 to 112 3/8.

UAL said it would spend $3 billion to upgrade its fleet over the next five years. UAL has already ordered a total of 63 new planes from Airbus Industrie and Boeing.

NASDAQ

Wang Laboratories rose 1 9-16 to 15 7/8.

Microsoft fell 1/2 to 71 5/8.

The companies resolved a 21-month patent fight, and Microsoft said it plans to take up to a 10 percent stake in Wang.

AMEX

ALC Communications rose 1/4 to 38 1/2.

Frontier Corp. offered to buy ALC for about $1.57 billion in stock.