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|| Saudi investor acquired stake in GM for $500 million

kingdom-gm.pngSaudi billionaire Prince Alwaleed Bin Talal and his Kingdom Holding Co. bought $500 million of General Motors shares through the automaker’s IPO - the Bloomberg is reporting.

The 1 percent stake in Detroit-based GM was acquired because of “the global strength of General Motors brand, the relatively attractive offering price, and the company’s growth prospects in Brazil and China,” the Riyadh, Saudi Arabia-based company said.

Kingdom Holding is listed in the Middle East Investors Directory with the code BFD84.

More details from the Bloomberg follows

Saudi billionaire Prince Alwaleed Bin Talal and his Kingdom Holding Co. bought $500 million of General Motors Co. shares through the automaker’s initial public offering.

The 1 percent stake in Detroit-based GM was acquired because of “the global strength of General Motors brand, the relatively attractive offering price, and the company’s growth prospects in Brazil and China,” the Riyadh, Saudi Arabia-based company said today in an e-mailed statement.

GM’s owners, including the U.S. Treasury, sold shares at $33 each in an IPO on Nov. 17. The automaker had filed with the Securities and Exchange Commission on Nov. 3 to offer the shares for $26 to $29 each. The company raised more than $20 billion in common and preferred shares through the offering, which reduced the U.S. government to a minority shareholder.

“You want to place shares with investors who aren’t going to flip them immediately,” said Matt Therian, a Greenwich, Connecticut-based analyst at Renaissance Capital LLC, which has studied IPOs since 1991. “With larger, international offerings, you see cornerstone investors come in. Hopefully, they’ll be stable shareholders and that should be a positive.”

Noreen Pratscher, a spokeswoman for GM, declined to comment.

Shareholder Base

GM attracted a “high-quality shareholder base” with about 90 percent of shares held in North America, Chief Executive Officer Dan Akerson said Nov. 18 in a Bloomberg Television interview. The offering by GM came 16 months after the largest U.S. automaker emerged from bankruptcy and brought Akerson closer to his goal of returning the $49.5 billion the company received in a taxpayer bailout last year.

After proceeds from GM’s IPO, the U.S. Treasury Department has now received $252 billion in repayments related to the Troubled Asset Relief Program, the department said in an e- mailed statement.

GM said separately today it will introduce a 60-second commercial with “serious and comic images of failure” followed by “images of recovery, or comeback.” The advertisement coincides with the Thanksgiving holiday celebrated on Nov. 25, and will end “We all fall down. Thank you for helping us get back up.”

Kingdom’s Investments

Kingdom Holding also has stakes in Apple Inc., Citigroup Inc., News Corp. and PepsiCo Inc., according to the company’s website.

Alwaleed, 55, ranks 19th on Forbes magazine’s list of the world’s richest billionaires, with an estimated net worth of $19.4 billion as of March 10. Alwaleed owns 95 percent of Kingdom Holding, according to Bloomberg data.

Kingdom Holding restructured its business after struggling through the global financial crisis. Riyadh-based Kingdom Holding lowered its share capital by 41 percent to 37.1 billion riyals ($9.89 billion) in February and offered on March 15 to purchase the rest of the shares in Kingdom Hotel Investments.

GM’s investment bankers met with sovereign wealth funds and private investors in the Middle East and Asia during its stock sale, two people familiar with the meetings said in October.

SAIC Motor Corp., GM’s Chinese partner, also acquired a $500 million stake in the automaker through the IPO. The purchase was made “on the basis of a good strategic partnership between the two” and based on SAIC’s “confidence in GM’s development prospects,” the Shanghai-based carmaker said in a Nov. 18 e-mailed statement.

Kuwait Investment Authority, the country’s sovereign wealth fund, decided against buying GM shares after the sale price was raised, a person familiar with the matter said Nov. 21.

GM fell 83 cents to $33.25 at 3:34 p.m. in New York Stock Exchange composite trading.



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