General Motors Company (NYSE:GM) had the world’s biggest IPO last week after underwriters bought additional shares. The added shares that were purchased had helped GM slide past Agricultural Bank of China’s $22.1 billion IPO this past July. The underwriters were led by Morgan Stanley, JPMorgan Chase & Co., Bank of America Merrill Lynch, and Citigroup Inc. These underwriters had exercised their full option of on an additional 71.7 million common shares that were worth $2.37 billion.
The underwriters had also exercised an option to buy 13 million preferred shares for $650 million. The underwriters had about 30 days from the IPO to exercise the options. GM raised $20.1 billion in their IPO of common and preferred shares. Without the purchase of the additional preferred shares, GM’s IPO would have been lower than the Agricultural Bank of China.
The U.S. Treasury is GM’s largest shareholder with about one third of shares outstanding. Other underwriters include Barclays Capital, Deutsche Bank, Goldman Sachs, Credit Suisse, and Royal Bank of Canada. Advisers to the Treasury include Lazard and Boston Consulting Group.