DETROIT (AP) -- Investor demand for General Motors stock has been so strong that the company will expand its initial public offering by 31 percent, to 478 million common shares, a person briefed on the sale said Tuesday.
The move, coupled with an expected stock price of $33 per share, brings the U.S. government closer to getting back the $50 billion it spent bailing out GM last year.
If the government sells its 412 million shares on Thursday for $33 each, it will get $13.6 billion. It will still have about 500 million shares, or about 33 percent of GM. It would have to sell them for about $53 a share, or $26.4 billion, for taxpayers to get their $50 billion back.
The increased number of shares could make GM's IPO the largest in history for a U.S.-based company. If GM's sale of preferred shares is included, the offering could have a total value of over $22 billion, topping Visa Inc.'s $19.7 billion IPO in 2008, according to the IPO tracking firm Dealogic. It could even grow to become the world's largest IPO.
GM is expected to announce the final price of the IPO on Wednesday and shares will start trading the following day, according to the person, who asked not to be identified because he is not authorized to speak publicly about the sale.
Most of the additional shares will be sold by the U.S. government, said the person. A union health care trust would sell a small part of the added shares, the person said.
In addition, bankers handling the GM sale will take an option to sell another 72 million shares. That would bring the total value of the 550 common shares for sale in the IPO to $18.1 billion.
GM will sell preferred shares worth $4 billion, bringing the total value of the deal to just over $22 billion.
GM's bankers stopped taking orders for the sale on Tuesday afternoon after essentially running out of shares to sell, the person said.
GM spokesman Selim Bingol and U.S. Treasury Department spokesman Mark Paustenbach would not comment.
Earlier Tuesday, GM raised the expected price range for the common shares to $32 to $33, from $26 to $29, and it added 20 million preferred share total, bringing it to 80 million.
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