Kerkorian buys a one-third stake in Delta Petroleum
01 Jan 2008
Billionaire Kirk Kerkorian is buying a one-third stake in oil and gas producer Delta Petroleum. On Monday 31 December, the company announced that it will accept financing of $684 million from Tracinda, an investment corporation wholly owned by Kerkorian.
In return, Tracinda will receive 36 million Delta shares, representing a 35 per cent stake in the company. Tracinda is paying $19.00 per share, a 23 per cent premium on Delta's closing share price on Friday 28 December.
Delta proposes to use the money to speed up natural gas drilling projects in the Piceance and Paradox basins, located in Colorado and Utah. The company is also looking for acquisitions. Tracinda cited a strong management and sizable growth potential as reasons for its investment in Delta.
The 90-year-old Kerkorian has a fortune of $18 billion. He is the seventh-richest person in the US, according to Forbes. The middle-school dropout has built his fortune with savvy investments in the airline, hotel, casino and movie industries.
Kerkorian is buying into Delta after its offer to buy a 16 per cent stake in oil company Tesoro was thwarted by a 'poison pill' plan, which makes it difficult for any shareholder to acquire more than 20 per cent of Tesoro.
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