Ask Investors, Kerkorian Tells Chrysler : Autos: Letter proposes his bid be put to shareholder vote and challenges car company’s version of events. Chrysler disagrees.

A day after being rebuffed by Chrysler Corp.’s board, financier Kirk Kerkorian struck back Tuesday with a stinging letter to Chrysler Chairman Robert J. Eaton, offering new details on his $22.8-billion takeover offer and asking that it be put to a shareholder vote.

Kerkorian, in a letter made public late Tuesday, challenged Chrysler management’s account of the events leading to the offer and took the company to task for questioning his ability to raise financing. He claimed Chrysler “intimidated” investment bankers into not discussing the deal, “with threats of both commercial retaliation and legal action.”

Even though it expressed surprise at the time Kerkorian announced the offer two weeks ago, Chrysler management had in fact known about a potential bid since last December, and top executives at one point described the deal as “doable” and “intriguing,” Kerkorian said.

“As you know, we never intended, and still don’t intend, for this transaction to be hostile,” Kerkorian said in his most extensive public comment on the deal. “You turned it into a hostile transaction.”

Kerkorian, who owns about 10% of Chrysler stock, said he would give up the effort to take over the company if shareholders rejected the $55-a-share offer. Kerkorian asked that if the bid fails to win shareholder approval, shareholders vote on a proposal to increase the company’s dividend payments to $5 a share from the present $1.60.

In response, Chrysler said the letter does not include “anything of substance” not already considered by the board, and it disagreed with Kerkorian’s account of the communications between the auto maker and Kerkorian’s Tracinda Corp., which made the offer. Chrysler said it would respond to the letter but did not indicate when.

“As indicated yesterday, Chrysler is not for sale, and the Chrysler board is not willing to gamble the future of the company or its employees in an LBO (leveraged buyout),” the company said in a statement.

Chrysler shares on Tuesday eased 37.5 cents to $44.125 on the New York Stock Exchange. Kerkorian’s letter was made public after the markets closed.

In his letter, Kerkorian revealed several details of the offer that had not been made public, including a proposal to give a 20% stake in Chrysler to workers and 5% to management at no cost.

Despite fears that a takeover would result in cutbacks in research and development, Kerkorian said the plan calls for no reductions and, in fact, proposes capital expenditures that exceed the company’s own plan by $500 million. “Why would we want to make a $2-billion investment in a ‘crippled company’ that could not compete?” he said.

Kerkorian also described as “hopelessly vague and noncommittal” the company’s plans to repurchase shares and increase dividends.

“Many great companies (GM, IBM, Eastman Kodak, Kmart, American Express, Borden) have learned that it is wise to listen to their shareholders,” Kerkorian said. “Why hasn’t Chrysler learned that lesson?”

Kerkorian pointed out to Eaton that his investment group had “been the largest shareholder of the company much longer than you have been the CEO” and that “key decisions regarding the future of Chrysler are being made by a group of people who own less than 1% of the stock of the company.”

Kerkorian did not set a deadline for Chrysler to respond. Chrysler’s annual shareholders meeting is scheduled for May 18 in St. Louis.