Morgan Stanley and JPMorgan to lead GM IPO

Morgan Stanley and JPMorgan Chase and Company are expected to be the lead underwriters in General Motors' initial public offering, a source said on Friday, a role more attractive for its prestige than its fees.

Banks were competing fiercely to underwrite an offering that could be $10 billion (Dh36.73bn) to $20bn, a person briefed on the matter said.

At that size, the deal would be the largest US IPO since Visa's offering of $19.7bn in March 2008, according to Thomson Reuters data, and one of the biggest US offerings of all time.

The US Treasury Department owns nearly 61 per cent of the automaker's common shares after GM filed for bankruptcy last year. The automaker has since emerged from Chapter 11 protection and an IPO is a key step for GM to end its support from the government.

"The sooner they can get the government out of there the better," said Aaron Bragman, an analyst at research firm IHS Global Insight.

Analysts have estimated that the company could be worth more than $80bn, which would leave taxpayers with a sizeable paper profit. The automaker's connection with the US government has earned it the nickname "Government Motors" and cost it market share domestically among consumers who view it as a failed company, analysts say.

Morgan Stanley has been one of the US government's key advisors during the crisis.

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