Ford says family shielded firm from takeover bids
By Mark Truby / The Detroit News
DEARBORN -- Ford Motor Co., weakened by financial losses and a slumping stock price, likely would have been taken over in the past 18 months if not for the controlling interest of the Ford family, Chairman and CEO Bill Ford Jr. said.
Bill Ford and the other descendants of company founder Henry Ford control a 40 percent voting stake in the company through their ownership of special Class B shares. The ownership stake, first established in 1956, makes a hostile acquisition of Ford nearly impossible.
"It prevents Ford from being taken over," Bill Ford told The Detroit News in an interview Wednesday. "And given where our stock price has been in the past 18 months, it's a high likelihood that that would have happened."
The comments from the great-grandson of Henry Ford come as the company prepares to celebrate its 100th anniversary on June 16 in Dearborn. Unlike other business dynasties, the Ford family has steadfastly maintained its control of the auto company that bears its name.
Ford's comparatively low market value of $17.7 billion -- the combined value of its outstanding shares -- together with its $26 billion cash hoard would normally make it attractive to rivals, corporate raiders or companies outside the auto industry.
"We clearly would have been a takeover target," Bill Ford said. "I have heard that from a number of people on Wall Street."
Ford shares closed Wednesday at $9.67, up 5 cents, on the New York Stock Exchange. They hit a 52-week low of $6.58 in February.
In 1995, billionaire investor Kirk Kerkorian launched an unfriendly takeover bid of the former Chrysler Corp. The acquisition attempt by Chrysler's largest shareholder failed due to lack of financing. Chrysler was eventually bought by Germany's Daimler-Benz AG in 1998 for $36 billion.
UBS Warburg auto analyst Saul Rubin agreed that Ford could have found itself in the same position without the family's controlling interest.
"That's certainly possible," Rubin said. "Daimler could have easily taken over Ford if the family hadn't been in the way. Volkswagen may well have been interested."
Rubin added, though, that consolidation in the auto industry can be a positive thing for shareholders.
In recent years, Ford has explored possible deals with Daimler, Italy's Fiat SPA and Germany's BMW AG. The discussions with BMW resulted in Ford's $2.9 billion purchase of Land Rover in 2000, but the other talks fizzled.
"Ford has some brands that would be attractive to outside parties," said Morgan Stanley analyst Stephen Girsky. "(General Motors Corp.) has worried from time to time that it could be a takeover target, but it just never happened. Auto companies are not always the most attractive takeover targets so it's hard to know what would have happened."
Opinions on the value of the Ford family's control of the automaker vary widely on Wall Street and among shareholders. Bill Ford, the first Ford family member to serve as company chairman since Henry Ford II retired in 1979, said he believes it's ultimately a positive for shareholders.
"I think it is a good thing as long as the Ford family is responsible and acts in the best interest of the company," he said. "The Ford family provides a sense of continuity for our employees, dealers and shareholders. With the employees there is a sense that we are in here for better or for worse, through thick and thin.
Said Girsky: "My attitude is you know the Ford family is involved. You either like it or you don't. If you don't, don't buy the stock."
(Photo)Bill Ford Jr.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....