Billionaire investor Kirk Kerkorian’s Tracinda Corp. said Thursday it is dropping a plan to boost its stake in Delta Petroleum, citing the steep decline in Delta’s share price and uncertainty in the stock market.
Tracinda announced Oct. 31 its intent to buy another 14 million Delta shares, saying there was “significant value in the oil and gas industry.”
The $11-per-share offer represented a nearly 21 percent premium to Delta Petroleum’s closing stock price prior to the announcement.
Tracinda is already Delta’s largest shareholder, with a roughly 35 percent stake in the Denver-based oil and gas exploration company, and would have raised its position to 48.5 percent if it had completed the tender offer. Tracinda paid $684 million, or $19 a share, for 36 million shares in February.
But Delta’s shares, which closed Thursday down nearly 31 percent at $6.66, have lost 27 percent of their value in the past week.
Los Angeles-based Tracinda said it was still confident in the business and Delta’s management. Tracinda in October lowered its stake in Ford Motor Co. and said it would invest in other industries such as casinos, hotels and oil and gas, where it sees more value.
