June 19 (Bloomberg) -- Billionaire investor Kirk Kerkorian's Tracinda Corp. bought 40.8 million more Ford Motor Co. shares to build his stake to 6.5 percent, increasing his bet that the second-biggest U.S.-based automaker can be revived.

Tracinda's new shares were valued at $253.8 million based on yesterday's closing price and add to previous holdings of 100 million shares, or 4.6 percent. The latest purchases consist of 20 million shares acquired in a tender offer and 20.8 million more bought since June 16, Tracinda said today in a filing.

The disclosure comes two days after representatives of Tracinda met with Chief Executive Officer Alan Mulally and Chairman William Clay Ford Jr. Kerkorian has backed Mulally's plan to stem losses of $15.3 billion in the past two years.

``If he's reading Ford and Mulally like I am, he's making a good investment,'' said Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan. ``He's buying on the cheap. Ford is going to be around.''

Kerkorian, 91, disclosed in late April he had acquired 100 million shares. The purchases reported today brought his stake to 140.8 million shares and would make him the fourth- largest shareholder at Dearborn, Michigan-based Ford, up from No. 5, according to data compiled by Bloomberg.

His support so far for Mulally contrasts with his clashes with management when he owned shares of the former Chrysler Corp. and General Motors Corp. Through Tracinda, the Las Vegas-based investor made a hostile bid for Chrysler in 1995 and pressed for major changes at GM a decade later.

Ford's Response

``We continue to welcome confidence in Ford,'' said Mark Truby, a spokesman for the automaker. Tracinda spokesman Tom Johnson declined to comment beyond the filing. Tracinda said in previous filings it endorsed Mulally's plan to diversify Ford's product lineup and end losses.

Ford rose 10 cents to $6.32 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have slumped 27 percent in the past year.

Under the tender offer, which began May 9 and was completed June 13, Tracinda spent $170 million to buy 20 million shares at $8.50 each, according to today's filing. That was a 36 percent premium compared with Ford's June 13 closing price of $6.27.

Tracinda said that day that 826.2 million shares, or 40 times more than the Kerkorian offered to buy, were tendered. Kerkorian bought 2.42 percent of those submitted.

Tracinda's Purchases

Kerkorian also acquired shares on the open market this month, according to the filing, at prices of $6.35 to $6.55.

The filing repeated previous statements that Tracinda may propose business strategies for Ford and has studied ways of injecting more capital into Ford, without providing specifics.

Tracinda had held open the possibility that it might acquire additional shares when it announced the tender offer.

Voting control of the automaker by the family of founder Henry Ford presents Kerkorian with a different challenge than in his previous forays at GM and Chrysler.

The family holds 40 percent voting power through 70.9 million Class B shares. Those holdings represent 3.2 percent of Ford's total shares. The Class B shares have given the family influence when non-family members were at the company's helm.

Two family members now sit on the automaker's board, including Bill Ford, 51. He was CEO from late 2001 until September 2006, when he yielded the post to Mulally. Ford recruited Mulally from Boeing Co., where he oversaw commercial aircraft operations.

Praise for Mulally

Tracinda representatives had complimented Mulally, 62, before acquiring the stock. Jerome York, a Kerkorian adviser, said in a February interview in Chicago he was ``pretty impressed with the actions Alan Mulally is taking'' at Ford.

This week's meeting between Ford and Tracinda was a ``chance for the leaders of both companies to discuss elements of Ford's transformation plan that we have announced publicly,'' according to a statement from the automaker.

Under Mulally, Ford has eliminated factory and salaried jobs, shut plants and sought to lessen its dependence on large pickups and sport-utility vehicles. Mulally also recruited Jim Farley, a U.S. executive at Toyota Motor Corp., to be worldwide marketing chief.

Mulally hit a setback when U.S. gasoline approaching $4 a gallon accelerated sales slides for trucks and SUVs this year. Ford retreated in May from a target of turning a 2009 profit.

Ford now is preparing to trim salaried-employee expenses by an additional 15 percent, which will include dismissals, slashing contract positions and not filling open jobs. Ford also told United Auto Workers union officials last week it will make more buyout offers at some U.S. plants.

Mulally began putting his turnaround in place shortly after joining Ford. In late 2006, the automaker borrowed $23.4 billion to finance plant closings and job cuts while still developing new models. As collateral, Ford put up assets including its headquarters building and Ford blue oval trademark.

``We stress-tested the business plan to make sure that we had enough liquidity, and we're in good shape,'' Mulally told reporters earlier this month in Washington.

To contact the reporter on this story: Bill Koenig in Southfield, Michigan at wkoenig@bloomberg.net

Last Updated: June 19, 2008 16:26 EDT