GM will buy 200 million shares from U.S. Treasury, Government plans full exit within 18 months

GM will buy 200 million shares from U.S. Treasury
Government plans full exit within 18 months
Mike Colias
Automotive News | December 19, 2012 – 8:06 am EST

DETROIT — General Motors today said it will buy 200 million shares of its stock from the U.S. Treasury for $5.5 billion and that the government intends to unload all of its shares within 18 months.

GM will pay $27.50 a share, an 8 percent premium over its current share price. GM CFO Dan Amman said the price was set through negotiations between GM and Treasury officials.

“This announcement is an important step in bringing closure to the successful auto industry rescue.” CEO Dan Akerson said in a statement. “It removes the perception of government ownership of GM among customers and it demonstrates confidence in GM’s progress and our future.”

The buyback will leave the Treasury with about 300 million shares, or a 19 percent stake on a fully diluted basis. The United States became part owner of GM after steering the automaker’s 2009 bankruptcy.

The Treasury Department said in a statement today that it will begin selling the remainder of its GM shares as early as next month.

The buyback is expected to close by Dec. 31. GM said the sale should boost its earnings per share because GM’s total shares outstanding will be reduced by 11 percent. GM said it will take a $400 million fourth-quarter charge as a result of the buyback.

In a meeting with reporters today, Ammann said that “removing the perception of of government involvement in the company” will be “good for selling more cars.” He said GM’s own market research has shown that government ownership has weighed on demand for the company’s vehicles.

Seniority Lists
Bargaining Committee

Mike Herron
Tim Stannard
Zone at Large – 1st
Danny Taylor
Zone at Large – 2nd
Mark Wilkerson
Joe McClure
Chad Poynor
Steve Roberts
Derek Lewis
Bill Cundiff
Kirk Zebbs
Don Numinen
Jay Minella
Danny Bragg
Chris Hill
Rashad Thomas
Keith Oswald
Chris Brown

1853 Officers

Tim Stannard
Mike Herron
Vice President
Darrell DeJean
Financial Secretary
Mark Wunderlin
Recording Secretary
Peggy Mullins
Trustee (3)
Jay Lowe
Dave Clements
Dave Spare
Sgt. at Arms
David C Spare
Ashley Holloway
E-Board at Large (2)
David Ryder
Steve Roberts

GM Unit Chair
Mike Herron
Leadec Unit Chair
Larry Poole
Ryder Unit Chair
Patrick Linck
AFV Unit Chair
Katherine McGaw
Retiree Chair
Mike Martinez