1:53 PM
By Soyoung Kim and David Bailey
NEW YORK/DETROIT | Wed Nov 3, 2010 4:12pm EDT
NEW YORK/DETROIT (Reuters) - General Motors on Wednesday finalized terms for a stock offering of nearly $13 billion to repay a controversial taxpayer-funded bailout and reduce the U.S. Treasury to a minority shareholder.
GM's filing with U.S. securities regulators marks the final step before it begins marketing what is expected to be one of the largest-ever IPOs. The investors are expected to span the globe and include sovereign wealth funds.
The automaker plans to sell 365 million common shares at $26 to $29 each, raising about $10 billion at the midpoint, according to updated initial public offering papers filed with the U.S. Securities and Exchange Commission.
In addition, GM said it plans to sell about $3 billion of preferred shares that would convert to common shares under mandatory provisions, a less risky form of equity that could attract dividend and growth-fund investors.
The offering, potentially the largest U.S. IPO since Visa Inc's $19.7 billion IPO in 2008, would cut the U.S. Treasury's current 61 percent stake to just over 43 percent.
GM's underwriters could sell an additional 54.75 million common shares and 9 million preferred shares if the IPO attracts robust investor demand, raising another roughly $2 billion and potentially taking the total IPO amount to as much as $15.65 billion, the company said in the amended prospectus.
The Treasury, which holds a 60.83 percent stake in GM as a result of its $50 billion bailout, is cutting that stake to 43.26 percent in the IPO, excluding the overallotment option.
Once a blue-chip stock, GM is expected to return to the New York Stock Exchange under the "GM" ticker symbol it had traded under before its 2009 bankruptcy.
GM is expected to price its IPO on November 17 and begin trading on the New York and Toronto stock exchanges on November 18, sources have said.
The governments of Canada and Ontario plan to sell down their combined stake to 9.64 percent from 11.67 percent and the United Auto Workers VEBA trust is expected to reduce its stake to 15.33 percent from 19.93 percent.
(Reporting by Soyoung Kim, Clare Baldwin and David Bailey, additional reporting by Jonathan Stempel; Editing by Gary Hill)
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