Sovereign wealth, foreign funds less than five percent of IPO, some quit IPO after price increase
General Motors Co shares rise when they begin trading on Thursday, it will be
investors in North America who stand to benefit the most, two sources familiar
with the situation said.
initial public offering was upsized primarily on demand from big North American
mutual and pension fund investors, the sources said. North American investors
will account for more than 90 percent of the IPO, one source said.
pulled off the biggest initial public offering in US history on Wednesday,
raising $20.1bn after pricing shares at the top of an increased range in response
to huge investor demand.
sold 478 million common shares at $33 each, raising $15.77bn, as well as
$4.35bn in preferred shares, more than the initially planned $4bn.
an option that would allow underwriters to sell more shares, expected to be
exercised in coming days, GM looks set to raise $23.1bn, making it the biggest
wealth funds in the Middle East and Asia and other large international investors
will account for less than five percent of the total GM offering including
common and preferred shares and the overallotments, the second source said,
adding that the proportion of GM shares allocated to overseas investors
decreased as the IPO grew.
of the larger sovereign wealth funds were price-sensitive and decided not to
invest when GM raised its IPO price range, the first source said.
earlier this week raised the price range for the common stock part of its
offering to $32 to $33 per share from $26 to $29 per share.
percent of the total GM IPO is equivalent to about $1.2bn. The identities of
individual investors, including sovereign wealth funds, are not public.
in October met with Singapore-based GIC and Temasek Holdings, Kuwait Investment
Authority (KIA), Qatar Investment Authority and the Abu Dhabi Investment Authority.
It is unclear which, if any, of those funds invested.
KIA planned to take a stake of one percent or less in the carmaker, Bloomberg reported on Wednesday, citing a person familiar with the deal.
is also unclear whether GM's China partner, state-owned SAIC Motor Corp Ltd was
able to move beyond a last-minute regulatory hurdle that threatened its plans
to take a one percent stake in GM.
is majority owned by the US Treasury after a $50bn US taxpayer-funded bailout.
Potential investments by overseas entities have remained a touchy subject for
government-owned GM throughout the IPO process because of the possibility for
any such investment to trigger a political backlash.
US Treasury in September even went so far as to post guidance online that IPO
investors would be sought primarily in North America and would include US
retail buyers, but that the investor pool would be large and diverse and
investors would be sought "across multiple geographies."
the final accounting, more than 20 percent of the IPO – or more than $3bn worth
of stock - will go to individual investors, one source said.
shares are expected to begin trading on the New York and Toronto stock
exchanges on Thursday.