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[marayatano]

Seems as if demand is very high for GM. It is (may be) priced outside of its original $26 to $29 range on the upper end.

GM seen pricing IPO above $30 per share: sources
reuters


On Monday November 15, 2010, 3:46 pm EST

By Soyoung Kim and Clare Baldwin

NEW YORK (Reuters) - General Motors Co (GM.UL) is expected to price its initial public offering at a minimum of $30 per share, above the initially proposed range, two people familiar with the matter said on Monday.

A higher per-share price reflects robust investor demand for the restructured U.S. automaker and would cut the expected losses for the U.S. Treasury in the first tranche of the stock sale.

GM's IPO is expected to price on Wednesday and begin trading on the New York and Toronto Stock Exchanges on Thursday. At $30 per share, GM would raise about $10.95 billion in common stock.

Based on a diluted share count of 1.9 billion, a $30 per share price would give GM a market value of about $57 billion. GM needs a market value of roughly $70 billion for U.S. taxpayers to break even on their $50 billion bailout.

Speaking to Reuters in Detroit on Monday, former head of the Obama Administration's auto task force Steve Rattner said GM's IPO will almost certainly price above the top end of the $26 to $29 per share price range it filed for.

"Absent some dramatic change in the world in the next 48 hours, this will definitely price above the range," Rattner said.

The success of GM's IPO, coupled with renewed investor confidence in the auto market, will also help Chrysler's bid to return to the stock market in the second half of 2011, Rattner said.

GM has filed to sell about $10 billion worth of common stock at the midpoint, and $3 billion worth of preferred shares, but is seeing outsized demand even before the order books close.

GM is returning to the public markets a little over a year after a government-backed restructuring, from which the U.S. Treasury emerged as the majority shareholder with a 61 percent stake.

The government-backed restructuring was designed to leave GM with sharply lower costs and higher profit potential.

GM's IPO is expected to be the second-biggest U.S. IPO after Visa Inc (NYSE:V - News) and one of the biggest IPOs of all time, globally.

GM is unlikely to file an amended prospectus with a higher price range, the sources said.

China's SAIC Motor Corp (Shanghai:600104.SS - News) is set to take at least a 1 percent stake in GM as part of the IPO, one source said.

While other automakers have expressed interest in taking a stake in GM's IPO, SAIC will be the only automaker to buy into the offering, that source said.

(Reporting by Soyoung Kim, Clare Baldwin in New York and Philipp Halstrick in Frankfurt, additional reporting by James Kelleher in Detroit; Editing by Phil Berlowitz and Matthew Lewis)

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