Car maker increases expected price for sale of 365 mn shares
Strong investor demand has pushed up the value of General Motors’ (GM) share offering.
On Tuesday, the car manufacturer announced it had increased the estimated price range for the 365 mn shares of common stock being sold from $26-$29 to $32-$33 each.
The company also increased the number of preferred shares it is issuing as part of the share offering from 60 mn to 80 mn, which will bring in an extra $1 bn, or $4 bn in total.
As a result, the value of the share offering – including the common stock sale and the issuing of preferred shares – is more than $16 bn at the high end of the estimated price range. This could be even higher if the underwriters take up the optional over-allotment available to them.
The proceeds from the sale of common stock will go to the parties that helped bail out the car maker last year, including the US government and the national Canadian and provincial Ontario governments.
The US government will be the biggest seller as it currently owns a 60 percent stake in GM.
The company may amend its filing again to increase the number of common shares being sold, potentially pushing the amount to be raised in total to more than $20 bn, according to Reuters.
Trading in GM shares is expected to begin in New York and Toronto on Thursday.
