UPDATE 2-GM IPO now world’s biggest

* Underwriters exercise full options on extra shares

* Catapults GM IPO ahead of China’s AgBank

* Another sign of healthy demand for automaker’s shares
(Rewrites first paragraph, adds detail on IPO performance and

By Clare Baldwin and Jonathan Spicer

NEW YORK, Nov 26 (BestGrowthStock) – General Motors Co’s (GM.N: )
initial public offering became the world’s biggest at $23.1
billion after underwriters swiftly took up additional shares
following last week’s IPO.

The added shares vaulted GM past Agricultural Bank of
China’s (601288.SS: ) $22.1 billion IPO in July and underscored
the strong demand for the taxpayer-rescued automaker’s stock.

GM said on Friday that underwriters led by Morgan Stanley
(MS.N: ), JPMorgan Chase & Co (JPM.N: ), Bank of America Merrill
Lynch (BAC.N: ) and Citigroup Inc (C.N: ), exercised their full
option on an additional 71.7 million common shares worth $2.37

They also exercised an option to purchase 13 million
preferred shares for $650 million.

Underwriters had 30 days from the IPO to exercise the

GM last week had raised $20.1 billion in an IPO of common
and preferred shares in what was the biggest U.S. IPO ever.
Without the preferred shares, GM’s IPO would have been smaller
than China’s AgBank.

On Nov. 18, their first day of trading, the shares rose 3.6
percent. They closed on Friday up 33 cents at $33.81, or 2.5
percent above the $33 IPO price.

The U.S. government bailed out GM for $50 billion after the
automaker’s 2009 bankruptcy.

The IPO caps the first stage of a turnaround that has taken
the 102-year-old automaker from near-death to an unlikely Wall
Street flotation favorite in 2010.

A successful stock debut may help the Obama administration
argue that the controversial taxpayer bailout of GM was

The White House has said U.S. taxpayers are on track to
recoup the full investment made by the administration and that
it hopes to make substantial progress toward shedding the
government’s stake entirely by mid-to-late 2012.

The strong response to the stock sale reflects growing
investor confidence that GM is moving beyond its unpopular,
taxpayer-funded bankruptcy with sharply lower costs and higher
profit potential.

The U.S. Treasury remain GM’s largest shareholder after the
IPO with a third of the shares outstanding.

Barclays Capital, Deutsche Bank, Goldman Sachs, Credit
Suisse and Royal Bank of Canada are GM’s other major
underwriters. Lazard and Boston Consulting Group served as
advisers to the Treasury. Evercore Partners advised GM.

In the days before the IPO, the price range and the number
of shares, including preferred, were all increased.

GM last week sold 478 million common shares at $33 each,
raising $15.77 billion, as well as $4.35 billion in preferred
shares, more than the initially planned $4 billion.
(Reporting by Clare Baldwin and Jonathan Spicer; editing by
Carol Bishopric and Tim Dobbyn)

UPDATE 2-GM IPO now world’s biggest