DETROIT -- Billionaire Kirk Kerkorian's investment company on Wednesday offered to buy a large minority stake in General Motors at a premium to the struggling automaker's depressed stock price.
The announcement from Tracinda Corp. boosted GM stock nearly 10 percent and helped turn the broader market higher.
The $31-a-share offer price, including the regular quarterly dividend of 50 cents per share, represents about a 13.4 percent premium over GM shares' closing price Tuesday on the New York Stock Exchange of $27.77, Tracinda, which is owned by Kerkorian, said in a statement.
Tracinda, which already owns 22 million GM shares, said it will hold the common stock in GM, which last month reported it biggest quarterly loss since skirting bankruptcy 13 years ago, for investment purposes.
Upon completion of the offer, Tracinda would own 50 million shares of the world's largest automaker, or about 8.8 percent of the outstanding shares.
GM shares rose 9.1 percent to $30.30 in premarket trading on Inet after Tracinda's statement.
Tracinda said it became aware of rumors over the weekend concerning its possible purchase of GM shares and it decided to go forward with the tender offer to remove any uncertainty in the marketplace.
Kerkorian, a Las Vegas casino mogul, was the largest investor in automaker Chrysler before its link up with Germany's Daimler-Benz in 1998. He is currently appealing a court ruling that dismissed his $1 billion lawsuit over the handling of the deal that created DaimlerChrysler, the world's fifth-largest automaker.
Kerkorian accuses German auto boss Juergen Schrempp, who orchestrated one of the biggest deals in automotive history, of having misrepresented it as a merger rather than a takeover.