General Motors Co. plans to sell $10 billion worth of stock, or 24% of its total shares, in its initial public offering later this month, according to people familiar with the plan.
The 365 million shares are expected to sell for $26 to $29 each, these people said.
Under the plan, the U.S. Treasury would sell $7 billion of its shares in the auto maker. That would cut the government's stake, which it obtained in last year's U.S. bailout, below the symbolically important 50% from its current 61%.
At the midpoint of the proposed price range, GM's stock outstanding, including warrants, would be worth about $50 billion, roughly the same level as Ford Motor Co. The IPO's underwriters are hoping to sell at the top end of the range, and for the stock to rise 20% or more when trading begins. At that level, GM could be worth $60 billion or more.
A union-run health care trust and the governments of Canada and Ontario also are expected to participate in the IPO by selling some of the GM shares they obtained in the bailout. The United Auto Workers trust would sell $2 billion of its shares, while the Canadian governments would offload around $1 billion of their stakes.
The plan includes a stock split that will triple the number of GM common shares available to 1.5 billion.
Details of the stock offering are expected to be filed in a government document Tuesday, in advance of a "road show" GM is set to launch Wednesday to promote the IPO to prospective investors. Some details of the sale were earlier reported by Reuters.
GM executives will divide into two teams to pitch the IPO. One team will spend two days in the New York area this week, while the other will head to Toronto, according to people familiar with the plan.
The actual price of the stock to be sold in the IPO would be set about Nov. 17 and the sale would take place the following day.
The Wall Street Journal
