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Report: GM shares to be in $20-$30 range

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Report: GM shares to be in $20-$30 range



General Motors has repeatedly declined to comment publicly on its upcoming initial public stock offering.

But that isn’t stopping speculation about what the final asking price might be for a share of the new, post-bankruptcy GM.

Reuters, citing anonymous sources, is today reporting that GM plans to sell 365 million common shares for $26 to $29 each and will file the terms in an updated prospectus with the U.S. Securities and Exchange Commission on Tuesday.

The report also says that the government, which now owns 61% of GM, expects to walk away as a minority stakeholder in GM.

The Reuters report isn’t that surprising given GM Chairman Edward Whitacre’s comments last month that GM shares would likely be priced between $20 and $25 in the IPO. That’s likely after a 3-1 or 4-1 stock split upon issue.

GM later clarified his remarks, noting that a price had not yet been determined.



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GM IPO To Sell Shares At $26 To $29

Reports claims maker will aim to sell off $13 bil in common and preferred stock.

by Paul A. Eisenstein on Nov.01, 2010

New CEO Dan Akerson will lead the road show effort to sell GM's new stock.

The federal government will become a minority shareholder after General Motors upcoming IPO, according to well-placed sources, with the maker planning to sell 365 million shares of newly-issued stock for between $26 and $29 apiece.

In all, reports the Reuters news service, the once-bankrupt maker expects to mark its return to being a publicly-traded company by selling off a total of $13 billion in stock, including $3 billion in preferred shares.

The maker is expected to begin an IPO roadshow on Wednesday, following its release of third-quarter earnings. Analysts expect GM to be in the black for the third quarter in a row.

While GM has declined to comment on the Reuters report and has not yet stated what day the IPO will be staged, it has clearly been taking steps to prepare the way for the offering, last week announcing plans to reduce its debt by $11 billion and, in the process, cut debt and related payments by about $500 million annually.

Reuters quotes well-placed sources saying GM expects to sell as much as $2 billion of its new stock to four or five foreign sovereign wealth funds. The maker has reportedly discussed its plans with Kuwaiti bankers, among others. It also has been given a close look-over by its Chinese manufacturing partner, SAIC, with which it produces the Buick line in Shanghai.

Reuters claims the IPO will bring the U.S. government’s stake in GM down from 61.1 to 43.3%, which would still leave it the company’s largest single investor, but no longer a majority stakeholder. The Canadian and Ontario provincial governments, meanwhile, would reportedly bring their shares down from 11.7% to 9.6%.

And the United Auto Workers Union, which holds 17.5% stake through its retiree health care fund, or VEBA, would see that drop to 15%.

The IPO is now expected to be priced on November 17th, with shares beginning to trade on both the New York and Toronto stock exchanges a day later. Former U.S. auto czar Steve Ratner had, last month, predicted the stock offering itself would be held on the 17th. (Click Here for that story.)

Sources tell TheDetroitBureau.com that two teams of top GM executives will begin fanning out, on Wednesday, to meet with potential investors. One will be led by former Wall Street analyst and now GM Vice Chairman Steve Girsky. New GM CEO Dan Akerson will reportedly shuttle between the two groups to help convince reluctant investors.



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GM IPO target expected to be $26-$29



General Motors is expected to set a target price between $26 and $29 for its shares when it returns to the stock market later this month, according to reports citing unidentified people familiar with the matter.

The U.S. government is expected to reduce its stake in GM from 61% to around 43% in the sale, the Associated Press reported. The IPO is tentatively set for Nov. 18.

GM spokesman Greg Martin declined to comment on the reports.

Terms of the sale are not final because GM's board has yet to approve them, although it has accepted the general outline.

GM Chairman Edward Whitacre said last month that GM shares would likely be priced between $20 and $25 in the IPO. GM later clarified his remarks, noting that a price had not yet been determined.

Later today or Wednesday, GM is expected to file a final registration statement that indicates the target price for GM's stock, likely after a 3-1 or 4-1 split, the Free Press previously reported. A road show to market the shares to investors will likely start this week.

The total IPO will range from $8 billion to $12 billion, and GM will offer only a portion of its shares. The rest will come in subsequent offerings in coming years -- at a higher price, the government hopes.

The sale would return GM to the New York Stock Exchange, where it was a symbol of American industrial might for more than 92 years before being booted off last year as troubles sent it into a government-funded bankruptcy.

GM is now a private company that's owned by the U.S. government, a United Auto Workers health care trust, the Canadian and Ontario governments and pre-bankruptcy GM bondholders. The bondholders will not participate in the IPO.

Those owners hold about 500 million shares total, and the U.S. government's stake is about 304 million.

U.S. taxpayers became GM's biggest shareholder when they gave the automaker $50 billion to survive bankruptcy restructuring and emerge as a smaller company with far less debt.

GM will have two road-show teams. Chief Financial Officer Chris Liddell will lead one; Vice Chairman Steve Girsky will lead the other. GM CEO Dan Akerson will help both teams.

Read more: GM IPO target expected to be $26-$29 | freep.com | Detroit Free Press http://www.freep.com/article/20101102/BUSINESS01/11020351/1331/business01/Expected-GM-IPO-target-26-29#ixzz147zSSOiH

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