GM’s IPO to be world’s biggest stock sale

US automaker General Motors yesterday said that its initial public offer (following its restructuring and emergence from bankruptcy in July 2009) has become the world's biggest IPO after underwriters yesterday exercised in full their over-allotment options to purchase an additional 71.7 million shares of common stock bringing the total size of the deal to $23.1 billion.

The IPO eclipsed that of the Agricultural Bank of China Ltd of Beijing, which collected $22.1 billion in share sales in Shanghai and Hong Kong last quarter.

The previous biggest offering in the US history was the 2008 IPO of Visa Inc, which raised $15.77 billion through the sale of 478 million shares of common stock and 87 million shares of mandatory convertible junior preferred shares.

But based on the sale of common-stock portion, GM's IPO is the second largest in US history, behind Visa.

The Detroit, Michigan-based car maker said that the underwriters have exercised in full their over-allotment options to purchase an additional 71.7 million shares of common stock from the selling stockholders, for a total of $2.37 billion, and an additional 13 million shares of mandatory convertible junior preferred stock from the company, for a total of $650 million.  
 
The exercise of the over-allotment options brings the total offering size to $23.1 billion. The closing for the additional shares is expected to take place on 2 December 2010.

The 35 underwriters led by Morgan Stanley, JPMorgan Chase, Bank of America, Citigroup and others, exercised their option although they had a 30-day period to purchase additional shares.