Detroit – General Motors Corp. is laying defenses against possible moves by disgruntled shareholder Kirk Kerkorian to exert control over the company or its board, say people familiar with the situation.
To bolster its defense, GM has retained two heavyweight investment-banking firms, Goldman Sachs and Morgan Stanley, to help prepare for a potential Kerkorian-led proxy fight or other hostile action.
The first specific actions were taken Oct. 3 when the GM board changed its bylaws to make it tougher for Kerkorian to elect a slate of directors or put strategic issues to a direct vote of GM shareholders.
People close to the company said GM chairman Rick Wagoner and the board are concerned that Ker korian may retaliate for GM’s rejection of an alliance with Renault SA and Nissan Motor Co.
GM had no comment Tuesday on its strategy toward Kerkorian, who owns a 9.9- percent stake in the company.
But legal experts say the moves approved by GM’s board Oct. 3 appear clearly designed to throw roadblocks in the path of a dissident investor such as Kerkorian.
“I don’t know if (GM) is expecting an attack, but I would say they are preparing for one,” said Peter Henning, a Wayne State University law professor and former enforcement officer at the U.S. Securities and Exchange Commission.
People familiar with the situation said Goldman Sachs was a key adviser on the board’s decisions Oct. 3 to amend four sections of the corporation’s bylaws and to add a new section.
The amended bylaws deal with elections of directors. The new section makes it more difficult for a shareholder – such as Kerkorian – to solicit “written consent” from other shareholders to influence GM’s strategic direction or management.
A GM spokesman said Tuesday the automaker has taken no action directed at Kerkorian, the billionaire financier who once launched an unsuccessful takeover of Chrysler Corp.
