Tracinda investment in Delta Petroleum gives Kerkorian 35% ownership, board representation

By Lisa Kerner

Charlotte, N.C., Dec. 31 - Tracinda Corp. will invest $684 million to acquire 36 million primary shares, or 35%, of Delta Petroleum Corp.'s common stock priced at $19 per share.

Tracinda's offer price is a 23% premium to Delta Petroleum stock's closing price on Dec. 28.

The cash infusion will allow Delta Petroleum to accelerate development drilling activities, including in the Piceance and Paradox Basins, a company news release stated.

In addition, Delta Petroleum said it will have "significant financial flexibility" to fund its long-term drilling programs and to increase its acquisition activity.

With the investment, Tracinda will have the right to nominate members to Delta's board of directors on a pro rata basis reflecting its share ownership.

Delta was advised by Morgan Stanley & Co. Inc. and Merrill Lynch & Co.

Denver-based Delta Petroleum is an oil and gas exploration and development company.

Tracinda is a privately held Nevada corporation wholly owned by Kirk Kerkorian.

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