GM Says Government's Stake in Citigroup Poses Conflict in IPO
The U.S. Treasury owns about 3.6 billion shares of Citigroup's common stock, equivalent to a 12.4% stake, which constitutes a conflict under financial industry rules, GM said in a filing with the Securities and Exchange Commission. Treasury also holds a 61% stake in the Detroit auto giant.
The circumstances require that Citigroup get consent before selling GM shares to clients with discretionary accounts.
GM reportedly hopes to raise $8 billion to $10 billion through the sale of stock, much smaller than first planned. Though the company has yet to set a price for its shares, Chairman Ed Whitacre has predicted that GM's common stock will be priced between $20 and $25 a share to make them affordable to small investors.
GM plans to set aside 5% of its common shares to allow employees, retirees and dealers to purchase shares at the IPO price. The parties have until Oct. 22 to sign up to participate in the program and must invest at least $1,000.