GM clarifies chairman's comments about IPO

AP News
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Posted: Oct 15, 2010 7:20 PM
GM clarifies chairman's comments about IPO

General Motors Co. on Friday clarified comments made earlier this week by Chairman Ed Whitacre about the automaker's expected initial public stock offering, saying the remarks "were not intended."

Whitacre told reporters in San Antonio on Wednesday that GM's IPO would take place sometime in November and estimated the shares would be priced from $20 to $25 per share. Investors have been waiting for GM to announce the share price, which traditionally is done in a filing with the U.S. Securities and Exchange Commission.

GM said Friday in a filing with the SEC that a price range for the offering had not yet been determined "and will be disclosed only after it has been determined." GM said it could not predict whether the offering will be priced in November.

GM has previously refused comment on the IPO price, saying that it is in a legal "quiet period" before the sale. So when Whitacre told reporters an estimated share price at a business event near his Texas home, the automaker issued the regulatory filing "for purposes of correction and clarification."

The Detroit automaker said Whitacre's statements "were not intended and should not be considered as offering material."

GM has not officially announced a date or price for the IPO, but it has been expected in November. The automaker has been waiting for U.S. regulators to allow its plan to sell shares to move forward.

SEC rules do not bar executives from talking about share prices, but analysts said earlier this week that Whitacre's remarks were ill-advised because market conditions could change. GM could also announce a lower starting price, which would be seen by investors as a sign of weak demand.

GM became a private company last year after filing for bankruptcy protection. The U.S. government became the largest shareholder when it gave the company $50 billion to help it survive. The government hopes to recoup that investment by selling its 61 percent stake over time.

Whitacre stepped down as GM's chief executive on Sept. 1 but remains chairman through the end of the year. Whitacre's replacement as CEO, Dan Akerson, has said it will take many sales over a few years for the government to fully unload its stake.