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Chrysler Corp.'s blunt response to a $22.8 billion takeover bid from billionaire Kirk Kerkorian and former Chairman Lee Iacocca should end debate about whether the action was hostile.

But the automaker left a door open for more maneuvering in their attempt to complete the second-largest corporate buyout ever.Chrysler said late Wednesday "the company is not for sale" but added its directors would review the audacious $55-a-share offer from Kerkorian's Tracinda Corp. A key Chrysler objection to the proposal is Kerkorian's intent to tap 70 percent of the company's $7.5 billion cash reserve to help finance the deal.

"We don't want to put Chrysler at risk," Chairman Robert J. Eaton said in the statement. Chrysler has built the reserve as a cushion that would let it operate normally and develop new cars and trucks during the cyclical industry's next slump.

"My best guess is that Kerkorian may come up with a higher and revised offer that doesn't deplete its cash reserve, or deplete it so much," independent analyst David Healy said.

Eaton refused to answer questions about the buyout at a news conference Thursday on a new engine plant, but he said the company's board "did and will consider any offer out there."

The buyout offer was announced Wednesday morning in a Tracinda press release that landed like a bomb on Wall Street. It also disrupted the opening of a press preview at the New York Auto Show, where Eaton canceled a speech to return to Detroit.

Investors traded 34.9 million Chrysler shares on the New York Stock Exchange compared with average volume of 2.7 million shares. At times the price was up more than $13 from Tuesday's close of $39.25. Chrysler closed Wednesday up $9.50 a share at $48.75, still substantially below Kerkorian's offer.

Early Thursdayk, Chrysler reported its first-quarter earnings fell 37 percent from a year ago despite a 3 percent rise in revenue.

The automaker reported profits for January-through-March of $592 million, or $1.59 per share, on revenue of $13.6 billion, vs. $938 million, or $2.55 a share, on revenue of $13.2 billion in 1994.

Kerkorian owns 22 million shares, about 10 percent of the company. He and many analysts contend that investors have undervalued Chrysler. That prompted him to push the company's board to boost its dividend in December and take other steps to drive up the stock price. But they haven't worked.

Kerkorian's intent with the buyout offer is to "maximize value for shareholders," Yemenidjian said in a telephone press conference before Chrysler's response. "We think Chrysler is a great company with great prospects."

Skeptics speculated Wednesday that it was a ploy by Kerkorian to "greenmail" the company - force it to buy his stake in the company for a price even higher than his offer. Yemenidjian denied that Wednesday.

"We're interested in buying the company, we're not interested in greenmail," he said.

More than two dozen lawsuits were filed Wednesday in Delaware seeking to block Chrysler from accepting Kerkorian's offer without negotiating a higher price.

Under the proposal, the casino-entertainment magnate would put up $2 billion of his own money. About $50 million would come from Iacocca, who retired as chairman in 1992 after becoming a corporate icon by bringing Chrysler back from bankruptcy's brink. Other investors, still to be recruited, would add $3 billion more.

An additional $5.5 billion would come from Chrysler's $7.5 billion cash surplus and the rest from bank loans and bonds.