UPDATE 1-Tracinda begins tender for Tesoro shares

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NEW YORK, Nov 7 (Reuters) - Billionaire investor Kirk Kerkorian's Tracinda Corp said on Wednesday that it had begun a tender offer for 16 percent of the shares in western U.S. refiner Tesoro Corp (TSO.N) at $64 each.

If successful, the purchase would give Tracinda a 20 percent stake in Tesoro, whose shares were up 19 cents at $59.32.

Tesoro declined to comment. It has urged shareholders to take no action pending its opinion on the offer, which is due out within 10 business days after the start of the tender.

The company owns seven refineries with a combined crude oil capacity of more than 660,000 barrels per day.

Tracinda said in a filing with the U.S. Securities and Exchange Commission that the offer for the 21.87 million shares represented a 36.7 percent premium over Tesoro's closing share price on Oct. 3, when it began purchasing the stock.

The offer expires on Dec. 6 and would raise Tracinda's stake in Tesoro to 27.4 million shares. (Reporting by Matt Daily in New York and Anant Vijay Kala in Bangalore; Editing by Lisa Von Ahn)