HIT THE ROAD

What if you threw a takeover party and no investors came? Las Vegas financier Kirk Kerkorian was in that predicament last week as his bid to acquire Chrysler for $23 billion, or $55 a share, seemed close to collapse. Not a single bank or financial partner has come forward to provide cash for the buyout since Kerkorian and former Chrysler chairman Lee Iacocca proposed it on April 12. That lack of support has caused Chrysler stock, which jumped nearly $10 a share to $48.75 on the day of the announcement, to fall back since then and close last week at $43.25. "This deal is dead in the water," says Lehman Brothers' analyst Joseph Phillippi. "Wall Street and long-term investors basically want Kerkorian gone."

The main reason is that lenders and potential partners worry that the company could be caught in an auto-industry downturn that would slash profits and the value of their investments. Chrysler recently reported first-quarter earnings of $592 million, down a steep 36% from the same period a year ago. Further declines in business could hit Chrysler particularly hard under the plan advanced by Kerkorian, which would load up the company with $10.7 billion of new debt while draining $5 billion from its $7.5 billion of cash reserves to help pay for the buyout. Chrysler has done its part to kill the deal by hinting that it would stop doing business with investment-banking firms that raised money for the takeover.

All this may leave Kerkorian with little choice other than to sell the 10% of Chrysler stock he owns (it has gained $152 million just since he launched the bid), which would fetch him a profit of $1 billion at current prices. Not bad for a rejected suitor.