GM Roadshow to Begin After US Elections: Report

Source: Reuters

US automaker General Motors plans to begin courting inves- tors for its initial public offering immediately after the Novem- ber 2 US midterm congressional elections, two sources famil- iar with the plans said on Wednesday.

GM’s roadshow is set to begin on November 3 and will last two weeks, the sources said. The IPO is expected to price on November 17 and debut on November 18, the sources said.

The sources cautioned that the plans were still being finalised and could change based on how US stock markets perform.

Waiting until after the November 2 elections would also allow bankers to tout GM’s third-quarter financial results to investors although the automaker has cautioned that the second half of the year will show a slowdown from the first half.

In August, GM filed paperwork for an IPO that could be worth as much as US$20 billion, making it potentially one of the biggest IPOs of all time and the biggest new issue in the United States since Visa’s March 2008 IPO of US$19.7 billion.

The final value of the IPO has not been set but one source said early plans for the IPO envisioned selling US$12 billion to US$16 billion in common stock and $3 billion to $4 billion in preferred stock that would convert to common stock under a mandatory provision.

GM filed paperwork for its IPO just over a year after emerging from a government-sponsored restructuring in bankruptcy. The US government poured US$50 billion of taxpayer money into the carmaker and emerged with a 61 per cent stake.

Despite its success in preventing the liquidation of GM and Chrysler that many analysts had feared, the government

bailout of the US auto industry has been criticised by Republi- can lawmakers and proved unpopular with voters.

The Obama administration is eager to cast the GM IPO as a success, but GM executives and government officials have repeatedly denied any political motivation in timing the IPO for the top US automaker so close to the mid-term congressional elections.

A final decision on how much of its stake in GM the US Treas- ury will sell in an IPO will be made in consultations led by Treasury Secretary Timothy Geithner and White House economic adviser Lawrence Summers after the terms of the deal are established, sources have said.

GM is waiting for its S-1 filing to be approved by the US Securi- ties and Exchange Commission.

Its shares will trade on both the New York Stock Exchange and the Toronto Stock Exchange since both the US and Canadian governments helped bail it out.