GM pulls off record float

 
Steve Dinneen
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GENERAL MOTORS closed 3.6 per cent higher yesterday after pulling off the biggest IPO in US history.

The stock closed at $34.19, up from its float price of $33 a share.

Frantic trading throughout the day saw more than 100m shares change hands, out of the total of 478m placed, while financial advisers struggled to meet the demands of investors desperate to get hold of the stock.

GM raised $20.1bn after pricing shares at the top of its proposed range. The total is expected to top $23bn after underwriters on the deal take up options to shift extra stock.

It is the largest ever IPO retail uptake, with small investors snapping up more than 17 per cent of the firm, although this was less than the 30 per cent originally expected.

Combined fees are estimated to have exceeded $248m, with Morgan Stanley and JP Morgan taking home around $40m each.

Bank of America Merrill Lynch and Citigroup were also listed as lead underwriters, with Barclays Capital, Deutsche Bank, Goldman Sachs, Credit Suisse and Royal Bank of Canada all working on the deal.

The roaring success of the IPO could set the US and Canadian governments up for a windfall down the line as they offload the remainder of their stakes.

The US government sold around half of its 61 per cent interest, while Canada sold 20 per cent of its 11.7 per cent stake.

Barack Obama hailed the float as a victory for his Tarp bailout scheme. He said: “Supporting the American auto industry required tough decisions and shared sacrifices, but it helped save jobs and rescue an industry and make it more competitive.”