Canada government said to seek bankers for sale of GM stake

Canada government said to seek bankers for sale of GM stake
Fri, Jul 26

Canada’s government has begun a search for investment banks to sell its stake in General Motors Co., a person familiar with the matter said.

The government hasn’t decided on the timing of any sale, said the person, who asked not to be identified because the plans aren’t public. Sky News reported Wednesday that Canada has asked investment banks to make pitches in coming days for the share-sale mandate.

Finance Minister Jim Flaherty said in December Canada doesn’t intend to be a long-term shareholder in Detroit-based GM. The federal and Ontario governments together hold 140 million common shares, or a 10 percent stake, worth about $5.1 billion at the current stock price, according to data compiled by Bloomberg. Canada is the third-largest shareholder, behind the U.S. Treasury and the GM-UAW Voluntary Employee Beneficiary Association.

In June, the U.S. Treasury said it agreed to sell 30 million shares of its GM stock at $34.41 per share. GM rose 0.90 percent to $36.19 at 9:40 a.m. in New York and has gained 26 percent this year.

Canada GEN Investment Corp., the agency that oversees the holdings for the two Canadian governments, had hired investment bank Rothschild Canada Ltd. to advise on the GM holdings.

“The government of Canada remains committed to exiting from ownership of GM as quickly as feasible, while maximizing the value of the government’s interests for Canadian taxpayers,” said Kathleen Perchaluk, a spokeswoman for Flaherty, in an emailed statement Thursday.

David Drinkwater, chairman of Rothschild Canada in Toronto, didn’t respond to a phone call seeking comment. Andrew Chornenky, a spokesman for Ontario Finance Minister Charles Sousa, didn’t immediately reply to phone calls seeking comment.

“Like any shareholder, it is their decision on when to sell their shares in our company,” said Tom Henderson, a GM spokesman in Detroit for the largest U.S. automaker.

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