Report: GM narrows search for banks for IPO

GM Renaissance Center Headquarters

GM has finally narrowed its search for a bank to handle its IPO; Morgan Stanley and JP Morgan Chase are the leading candidates thus far, according to reports. Such a move heavily suggests that GM is fast approaching its offering. According to the U.S. Treasury Department however, such a move will not take place prior to the fourth quarter. A spokesperson for JP Morgan Chase was not available for comment, and Morgan Stanley and GM declined to comment on reports from the Wall Street Journal and New York Times.

Although the Treasury Department has maintained that which bank is to underwrite the offering will be decided by GM, it will be subject to the Treasury”s approval. Also, it will be the Treasury and not GM that determines the underwriting fees.

It is expected that the GM IPO will generate $12 billion, which would put it behind Visa as the second largest IPO to date. This IPO represents a key step in the Treasury being able to recoup part of the remaining $44 billion in taxpayer money. While the Treasury is expected to sell some its shares in the IPO, its is expected that it will to take the government months, possibly years, to sell their entire stake.

– By: Stephen Calogera

Source: CNN