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GM Said to Approach Sovereign Wealth Funds to Boost Stock Sale

October 6, 2010
By David Welch and Jeffrey McCracken

Investment bankers for General Motors Co. have met with sovereign wealth funds and private investors in the Middle East and Asia to gauge interest in the automaker’s planned stock sale, said two people familiar with the meetings.

GM’s bankers had planned to approach Riyadh, Saudi Arabia- based Kingdom Holding Co., Abu Dhabi-based Mubadala Development Co., Qatar Holdings LLC and Singapore-based Temasek Holdings Pte. about GM’s initial public offering, said one of the people, who asked not to be named because the discussions are private.

Seeking large international investors is one way for the nation’s largest automaker to generate demand for its stock in preparation for an IPO next month. GM and its bankers are forging ahead with the stock offering in a year when at least 47 companies have postponed or withdrawn U.S. IPOs, two people familiar with the plan said.

“We have seen sovereign wealth funds involved with the larger international deals,” said Matt Therian, research analyst with Renaissance Capital LLC, a Greenwich, Connecticut- based research firm that has studied IPOs since 1991. “This is not a $100 million tech firm we’re talking about. This is a very large deal and it’s still a market that has pricing pressure.”

GM and the U.S. Treasury Department, which owns 61 percent of the company, aim to hold an $8 billion to $10 billion IPO in November, which is scaled back from the company’s original plan of as much as $16 billion, two people familiar with the matter said last month. The department is more interested in a high share price than a large initial sale, they said.

A GM spokeswoman, Noreen Pratscher, declined to comment.

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