Detroit (Reuters) - Financier Kirk Kerkorian made a bold bet on General Motors Corp. (GM.N: Quote, Profile, Research) on Wednesday, offering to more than double his stake to 8.8 percent in a move that raised investor confidence in America's industrial backbone and drove U.S. stocks broadly higher.

The unexpected announcement by Kerkorian's Tracinda Corp., which could pressure GM's management into speeding up a restructuring, sent the automaker's shares soaring 18 percent from their lowest levels in more than a decade. Shares in rival Ford Motor Co. (F.N: Quote, Profile, Research) and U.S. auto parts companies also climbed.

Kerkorian, who shook up the former Chrysler Corp. with a hostile takeover bid about a decade ago, will spend up to $868 million and buy as many as 28 million shares of the world's largest automaker.

However, Kerkorian's lawyer said late on Wednesday that the Las Vegas casino mogul had no intention of trying to win control over GM by building up an equity stake in the company.

"This is just a passive investment and there is no intent to control the company in any way," Kerkorian's lead attorney, Terry Christensen, told Reuters in a telephone interview.

"It's for investment only, and we wanted to be very clear about that," said Christensen, who has known the reclusive Kerkorian for about 30 years.

Christensen also ruled out a possible Kerkorian bid for a GM board seat, saying recent declines in its stock price had simply made it a good time to invest in "one of the world's great companies."

"Kerkorian is saying the world is not coming to an end at General Motors -- a stroke like this gives investors and the market a lot of confidence," said Craig Hodges, fund manager at Hodges Capital Management.

Kerkorian's move follows GM's $1.1 billion first-quarter loss posted last month, its worst result since it skirted bankruptcy in 1992, and management's efforts to seek concessions from its largest union for soaring health care costs. The loss sent GM's shares into a tailspin to the lowest levels since that 1992, after adjusting for the 2000 spin-off of Delphi Corp. (DPH.N: Quote, Profile, Research).

GM continues to lose vital U.S. market share to foreign rivals and has been hit by spiraling costs for employee health care and raw materials to build vehicles, causing ratings agencies to warn they could downgrade the automaker's debt to junk status at any time.

The $31-a-share tender offer price from the 87-year-old Kerkorian includes the regular quarterly dividend of 50 cents per share. The price represents about a 13.4 percent premium over GM shares' closing price Tuesday on the New York Stock Exchange of $27.77, Tracinda said.

High Stakes

Tracinda, the majority owner of casino and hotel operator MGM Mirage Inc. (MGM.N: Quote, Profile, Research) , said it already owns 22 million GM shares. After the offer, Tracinda would own up to 50 million GM shares, or about 8.8 percent of the outstanding stock.

Tracinda bought the 22 million shares over the past three or four weeks, a source close to the investment firm said.

GM said in a statement that it typically does not express a view on specific investor activity, but the "board and management are committed to enhancing shareholder value."

GM shares closed up $5.03, or more than 18 percent, at $32.80 on the New York Stock Exchange on Wednesday, the biggest single-day jump in the automaker's shares in decades. Ford's shares ended up 7.29 percent at $10.16, while Daimler Chrysler (DCX.N: Quote, Profile, Research) (DCXGn.DE: Quote, Profile, Research) shares were up about 4.2 percent at $40.95.

GM's bonds also rallied on the news. The bonds now pay a yield 6.17 percentage points higher than Treasuries, a risk premium that is 0.48 percentage point lower than on Tuesday, according to MarketAxess.

"There is no doubt in our mind that Tracinda's interest is not in the auto business, but rather in unlocking value embedded in non-core businesses," Merrill Lynch analyst John Casesa said in a research note.

Following the spike in GM shares, the stock market valued GM at about $18.1 billion, less than many smaller companies such as Gap Inc. (GPS.N: Quote, Profile, Research) and Avon Products Inc. (AVP.N: Quote, Profile, Research) .

The nonautomotive assets in GM's financial services unit, such as its commercial and home mortgage units, are worth as much as $25 a share, Casesa said. GM has said that it is in talks to sell off a majority of its commercial mortgage business.

But GM's core automotive unit is worth much less, partly due to the constraints in its union contracts and the high costs of its guaranteed pension and health care plans for 1.1 million current workers and retirees.

GM assessed its book value at $49.06 per share as of the end of 2004, according to a securities filing last month. More recently, several analysts put the company's book value at $45.27 per share.

Kerkorian Ups The Ante

Kerkorian was the largest investor in automaker Chrysler before its link-up with Germany's Daimler-Benz in 1998. He is currently appealing a court ruling that dismissed his $1 billion lawsuit over the handling of the deal that created Daimler Chrysler, the world's fifth-largest automaker.

Kerkorian's hand could pressure GM and the United Auto Workers union to cut jobs and close plants to make the company more competitive, said David Cole, director of the Center for Automotive Research in Ann Arbor, Michigan.

"I would be really, really concerned, particularly if I were the union," Cole said. Paul Krell, chief spokesman for the traditionally militant UAW, said it had no comment.