General Motors Announces Tender Offer for Preference Stock

Strategic Insights -

General Motors Corporation (GM) has announced that it will begin a tender offer on April 25, 1995, to purchase for cash any and all of its outstanding Series B, Series D, and Series G preference stock. The company aims to reduce its dividend requirements and annual administrative expenses associated with servicing holders of these shares. The tender offers will give shareholders the opportunity to sell their depositary shares at a premium over the prevailing market prices, without the usual transaction cost associated with a market sale.

Key Takeaways:

  • GM is offering to purchase 44.3 million, 15.7 million, and 23.0 million depositary shares, each representing Series B, Series D, and Series G preference stock, respectively.
  • The tender offers are being made to reduce GM's dividend requirements and annual administrative expenses associated with servicing holders of these shares.
  • Shareholders will receive the regular first quarter cash dividend payable per depositary share, with a record date of April 3, 1995, to be paid May 1, 1995.
  • The offers are independent and not conditioned upon any minimum number of depositary shares being tendered.
  • Each offer and withdrawal rights will expire at 12 midnight Eastern Time, on May 22, 1995, unless such offer is extended.
  • Merrill Lynch & Company Inc. is acting as the dealer manager in connection with the offers.

Statistics:

  • 44.3 million depositary shares representing Series B preference stock are being offered for purchase.
  • 15.7 million depositary shares representing Series D preference stock are being offered for purchase.
  • 23.0 million depositary shares representing Series G preference stock are being offered for purchase.
  • The tender offers will expire on May 22, 1995, at 12 midnight Eastern Time.
  • Shareholders will receive the regular first quarter cash dividend payable per depositary share, with a record date of April 3, 1995, to be paid May 1, 1995.

Sources:

  • General Motors Corporation (GM)
  • Merrill Lynch & Company Inc.
  • Georgeson & Co.
  • PRNewswire (April 24, 1995)