Ford Motor Company
(NYSE:F) shares jumped more than 5% in early trading after rumors
surfaced that the Ford family was considering selling off its
controlling stake. Bloomberg reported that executive chairman Bill Ford
Jr. had briefed directors on the Ford family members' views before the
shareholders meeting last Thursday, citing unnamed sources.
The
reaction to the rumor suggests that shareholders do not want the family
to have a controlling stake. The Ford family only owns only 4% of the
company's shares, but due to a dual class voting structure they control
nearly 40% of the votes. And in an M&A market that recently paid
$7.4 billion for 80% of DaimlerChysler, shareholders probably don't
want any nostalgic owners getting in the way of handsome profits.
These
dissident shareholder views were further reflected by the company's
annual meeting last week that had the third straight proposal to
eliminate the B shares. The proposal drew 27.4% of the vote, but the
company opposed the plan saying that the B shares provided "long-term
stability" to the company. Combined with the recent cross-generational
Ford family feud, many investors are hoping that the family will simply
unload or convert its shares.
However in the end the family's
attorney cleared the air saying, "The Ford family is not discussing the
sale of its holdings in Ford Motor Company. Statements attributable to
unnamed sources are untrue." Whether or not the family will eventually
sell remains to be seen, but at least we know where the shareholders
stand!
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