General Motors Co may sell shares in its initial public offering for as much as 14 per cent more than originally planned, making it the second-largest US IPO on record, according to four people familiar with the deal.
GM, 61 per cent owned by the US Treasury, will probably set a price of $32 to $33, said one of the people, who declined to be identified because the discussions are private. The auto maker, which had filed with the Securities and Exchange Commission on November 3 to offer 365 million shares for $26 to $29 each, would raise $12 billion selling shares at the new high end of the price range on November 17.
GM also plans to sell $4 billion of preferred stock, up from $3 billion, one of the people said. Demand has been so strong for both offerings that the Detroit-based company and the US Treasury discussed increasing the number of common shares sold, according to three of the people. GM reported a third- quarter profit of $2.16 billion last week.
“The Detroit auto makers are finally right-sized and smart,” said Frank Ingarra, co-portfolio manager at Novato, California-based Hennessy Advisors Inc., which oversees $900 million, including Ford Motor Co shares. “They finally got some tough, good management in there finding better ways to do things.”
