Steven Rattner, the former head of the U.S. government’s auto task force, said he expects General Motors Co.’s initial public offering to price above the range of $26 to $29 the company has announced.
“There is definitely a greater level of confidence in the ability of the carmakers to perform,” Rattner told reporters today at an Automotive Press Association event in Detroit. “That’s because of the profit numbers.”
GM, which earned $4.77 billion in the first nine months of the year, has said it plans to raise as much as $10.6 billion in the offering. The reception six GM executives have received from investors as they promoted the IPO has been strong enough to sell the shares for more $30, two people familiar with the deal said last week.
GM probably will exercise its so-called greenshoe or overallotment option, granting underwriters 54.8 million more shares, said the people, who asked not to be identified because the information is private.
The price range was “a little bit light” relative to his expectations for $35 or $40 a share, Rattner said in a Nov. 4 interview on Bloomberg Television.
Rattner also said non-executive Chairman Ed Whitacre’s nine-month tenure in the chief executive officer’s role, which Dan Akerson took over in September, shows why the automaker should separate the chairman and CEO roles. Rick Wagoner and Fritz Henderson also served as GM’s CEO in the past two years.
“It’s not a good idea for any company to go through four CEOs in 18 months,” Rattner said. “GM is the poster child of why you should split the jobs.”
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