Sources say that after meeting with sovereign wealth funds, General Motors Co. is on course to move ahead with its initial public offering during the week of Nov. 15.
Many are closely monitoring the events surrounding the GM IPO because of its expected scale and due to the involvement of the US government, which is hoping for a very successful stock offering to reduce its nearly 61% stake.
Sources added that the bankers who represented GM have met with sovereign wealth funds in Asia and the Middle East in the last two weeks to convince them that GM has emerged from its 2009 bankruptcy as a leaner and more dynamic competitor.
One source said that with regards to those meetings, the following were approached: Singapore-based GIC and Temasek Holdings, Kuwait Investment Authority, Qatar Investment Authority and the Abu Dhabi Investment Authority.
It was also revealed that concurrently, analysts from the 10 underwriter banks involved in the GM IPO have started a series of meetings last week in order to reach a consensus on the market value.
The sources said further that after analysts come to consensus on that valuation, GM will give investors a discount of 20% from that level in pricing shares for the IPO. It’s standard practice to give this margin of discount in IPOs to reward investors for taking a risk on a new issue. [via autonews - sub. required]