by Eliot Turner
General Motors filed for a $100 million initial public offering on Wednesday. This marks an important milestone in the car-maker’s attempt to reemerge to prominence following an incredibly tumultuous time in the company’s long history. While GM filed to raise $100 million in the offering, that is not necessarily the amount the company expects and hopes to raise.
Prior to the filing, many expected GM to seek $16 billion in an IPO in order to take the US Treasury’s ownership stake down from 61% to somewhere under 50%. It would take $70 billion for the US Treasury to sell its full stake in the company. In response to my post yesterday on the upcoming “hot” IPOs, reader Nickprc observed that the $70 billion figure “would be more than Ford’s market value of roughly $44 billion, but less than Toyota’s total market value of about $113 billion.”
Along with a common stock offering, GM will look to raise money via the sale of preferred stock. Whereas the common stock offering is an attempt to divest some of the ownership interests of the US Treasury and United Autoworkers Union (a 17.5% owner), the preferred stock offering will help General Motors raise money for the rejuvenated company’s own balance sheet.
The lead underwriters on the offering are some of GM’s fellow “bailout” recipients from the financial crisis days in JP Morgan (NYSE: JPM), Bank of America (NYSE: BAC), Citibank (NYSE: C) and Morgan Stanley (NYSE: MS). The IPO will be priced at some point closer to the actual offering date, which many expect to happen at some time between November and December.
Check back later for more information as the story unfolds.