But what is it?
Kerkorian's Tracinda Corp. has offered $868 million for as many as 28 million shares at $31 each. Tracinda already owns a 3.89 percent stake in GM and the tender offer would raise Tracinda's total holdings in GM to 8.89 percent or 50 million shares.
The purchase is "solely for investment purposes," the company said Wednesday.
"But his history suggests otherwise," says David Healy, an auto analyst with New York-based Burnham Securities. "I don't know any company he's invested in where he has been a passive investor in the long run. He's certainly generating a lot of takeover speculation."
In the late 1990s, Kerkorian made an attempt to gain control of the Chrysler Corp. Even though he failed to gain ownership, Kerkorian put pressure on Chrysler management, persuading them to increase the dividend. He tried to buy Chrysler in April 1995 for $21 billion, but the deal collapsed when financing fell through.
What are Kerkorian's motives this time?
Here are a few early scenarios:
The bottom line with any deal involving Kerkorian is that he is looking to unlock shareholder value.
GM has a market cap of $16 billion, but some analysts estimate GMAC could be worth $22 billion if it was sold off in its entirety. Analyst John Casesa of Merrill Lynch estimated Wednesday that "GMAC's non-auto assets could be worth $25 a share."
The trouble with a forced sale of GMAC is that GM and GMAC are so closely linked.
"You can do a sell-off on paper, but you can't separate the two companies because they are a totally integrated auto unit," Healy said.
A partial stake in GMAC could be sold to a third party allowing shareholders to realize some of GMAC's value, increase GMAC credit rating and retain a link between GM and GMAC.
But selling off the mortgage end of the business might mean GMAC ratings would decline even further if they are tied even more closely to the auto business and the fortunes of GM in North America, Healy said.
Some analysts have speculated Kerkorian's involvement in GM could force GM to adopt a hard-line stance with the UAW by dolling out hefty dividends that would eat into GM's cash and increase the risk of bankruptcy.
That threat, in turn, would force the UAW to give concessions when the labor contract is renegotiated in 2007.
This is a high-risk strategy for both parties and seems unlikely.
The union seems unwilling to move on many issues, including health care costs or reductions. A blatant cash drain doesn't seem like a plausible scenario for a company that needs cash to sustain itself on a regular basis.
Some analysts speculate the end-game here is for GM to simply buy out Kerkorian for a premium.
But GM's other shareholders would protest if Kerkorian was bought out. The stock could plunge. And then GM would be ripe for another corporate raider.
Again, another implausible strategy.
Maybe Kerkorian knows something about GM the rest of us do not. Kerkorian became a billionaire buying airlines, casinos and auto stocks for less than they turned out to be worth.
Perhaps that's the situation here.
"The sleeping giant has to be woken up," said one Hummer dealer Wednesday. "There has to be major changes. Kerkorian is a lightning rod for change and he thinks there's nothing that can't be fixed."
Said Casesa: "The Tracinda/GM story will take many twists and turns over many quarters. We expect GM to react vigorously and defiantly to Tracinda's actions. Given GM's considerable economic clout and political clout, we expect this to be a long, drawn out battle."
You may e-mail Jason Stein at [email protected]