General Motors Co. will likely price its initial public offering at or above the high end of the range next week on Nov. 17 while exercising an option to sell more shares, according to two people who have knowledge of the IPO preparations.
These sources said that potential investors have shown a strong interest about the IPO to the six GM executives who went out to promote the IPO.
As a result, GM is thinking of selling its shares at the high end of the $26 to $29 offering range or above $30. The sources also said that one of the likely buyers is SAIC Motor Corp., GM's partner in China.
They added that GM will probably exercise its so-called greenshoe option, giving underwriters 54.8 million more shares. This would help the US Treasury Department recover more of the public's $49.5 billion investment in GM. Because of the strong demand for the IPO, GM could secure a higher price when the US sells most of its shares in later offerings.
One of the sources said that GM's offering of 365 million shares, or 24% of the automaker's stock, is already oversubscribed by multiple times.
GM’s regulatory filing indicated that without issuing the greenshoe, the Treasury Department's stake would drop to 43% from 61%. The filing further stated that if the overallotment option is used, the stake would fall to 41%. [via autonews - sub. required]