USA Today
The initial offering of General Motors stock is expected to raise about $10 billion in a sale that will cut the U.S. government's stake in GM to below 50%, three people briefed on the sale said.
GM common stock is expected to sell for $26 to $29 a share when the IPO takes place, tentatively Nov. 18, according to the three people, who asked not to be identified because they are not authorized to speak on the matter. That would value the company at more than $46 billion, roughly the same as Ford Motor.
U.S. taxpayers, who bailed out GM last year, would see their ownership drop from 61% to about 43%, not including any extra shares bankers could offer if there is strong demand, the people said.
GM has wanted to shed government control, contending that it hurts the company's sales and public image. The government will get most of the $10 billion and recoup another chunk of the more than $50 billion GM rescue.
GM will not make any money from the sale of the 365 million common shares that will make up the IPO but will sell roughly $3 billion in preferred stock that will convert to common stock in 2013, the people said. Preferred shares pay a set dividend and are more like bonds. GM will use that money to repay loans and make pension payments.
Terms of the sale are not final because GM's board could still change them, one of the people said. GM's final registration filing with the government is expected by today.
GM and its bankers then will begin a "road show" to woo investors, primarily pension and mutual funds, but also some large individual investors. Common shares worth roughly $2 billion would be sold to investors in the Middle East, Europe and Asia, one of the people said.
Bankers leading the sale are recommending that the final share price be revealed Nov. 17 and the sale take place a day later, according to the people.
GM is now a private company owned by the U.S. government, a United Auto Workers retiree health trust, the Canadian and Ontario governments and former GM bondholders.
The Canadian governments are expected to cut their stake from 11.7% to 9.6%, while the UAW trust would cut its stake from 17.5% to 15%, two of the people said.
GM has repaid or plans to repay a total of $9.5 billion in government loans, and the government hopes to recoup its remaining $40 billion investment with the initial stock sale and several follow-up sales.
The four owners hold about 500 million shares total, but the total shares for sale in the IPO and subsequent sales will be increased with a 3-to-1 or 4-to-1 stock split, one of the people said. The split, which will take place before the IPO, will create about 1.6 billion shares of GM common stock, one of the people said.
GM common stock is expected to sell for $26 to $29 a share when the IPO takes place, tentatively Nov. 18, according to the three people, who asked not to be identified because they are not authorized to speak on the matter. That would value the company at more than $46 billion, roughly the same as Ford Motor.
U.S. taxpayers, who bailed out GM last year, would see their ownership drop from 61% to about 43%, not including any extra shares bankers could offer if there is strong demand, the people said.
GM has wanted to shed government control, contending that it hurts the company's sales and public image. The government will get most of the $10 billion and recoup another chunk of the more than $50 billion GM rescue.
GM will not make any money from the sale of the 365 million common shares that will make up the IPO but will sell roughly $3 billion in preferred stock that will convert to common stock in 2013, the people said. Preferred shares pay a set dividend and are more like bonds. GM will use that money to repay loans and make pension payments.
Terms of the sale are not final because GM's board could still change them, one of the people said. GM's final registration filing with the government is expected by today.
GM and its bankers then will begin a "road show" to woo investors, primarily pension and mutual funds, but also some large individual investors. Common shares worth roughly $2 billion would be sold to investors in the Middle East, Europe and Asia, one of the people said.
Bankers leading the sale are recommending that the final share price be revealed Nov. 17 and the sale take place a day later, according to the people.
GM is now a private company owned by the U.S. government, a United Auto Workers retiree health trust, the Canadian and Ontario governments and former GM bondholders.
The Canadian governments are expected to cut their stake from 11.7% to 9.6%, while the UAW trust would cut its stake from 17.5% to 15%, two of the people said.
GM has repaid or plans to repay a total of $9.5 billion in government loans, and the government hopes to recoup its remaining $40 billion investment with the initial stock sale and several follow-up sales.
The four owners hold about 500 million shares total, but the total shares for sale in the IPO and subsequent sales will be increased with a 3-to-1 or 4-to-1 stock split, one of the people said. The split, which will take place before the IPO, will create about 1.6 billion shares of GM common stock, one of the people said.
