Chrysler Doubles Stock Buyback Goal

Chrysler Corp. said Thursday it is doubling its $1 billion stock buyback program, a move aimed at increasing the value of the automaker’s stock and appeasing its largest shareholder, investor Kirk Kerkorian.

There was no word from Chrysler headquarters on whether directors took action Thursday on a deal to allow former chairman Lee Iacocca to cash in stock options in return for his withdrawal from Kerkorian’s drive to gain more control of the company.

The Wall Street Journal reported the Chrysler board was considering letting Iacocca exercise some of his options to buy 1.5 million Chrysler shares if he would stop working as a consultant to Kerkorian.

Sources close to the situation, who spoke on condition they not be identified, confirmed Thursday that an agreement was being negotiated.

Kerkorian in April floated a proposal to take over Chrysler in a $55-a-share, $22.8 billion deal financed in part with some of the company’s cash reserves.

Chrysler rejected the proposal and said it was not for sale. Kerkorian then executed a $50-a-share tender offer to add 14 million shares to his Chrysler holdings. He and his associates, including Iacocca, control 14.1 percent of Chrysler’s stock.