NEW YORK (Bloomberg) -- Ally Financial Inc., the former GMAC auto lender rescued by the U.S. government during the 2008 financial crisis, is helping the Treasury Department divest its stake by seeking as much as $2.7 billion in an initial public offering.
Treasury plans to pare its stake to 17 percent by selling 95 million shares for $25 to $28 apiece, according to a regulatory filing today with the U.S. Securities and Exchange Commission. The government currently owns 37 percent of the company, which used to be a subsidiary of General Motors. Ally plans to trade on the New York Stock Exchange under the ticker symbol ALLY.
“Over our 90-year history, we have successfully differentiated ourselves from our competition by providing premium services for automotive dealers,” Ally said in the filing. “We have multigenerational relationships with many of our dealers and have been a trusted partner through various economic cycles.”
The IPO is the culmination of a more than three-year process for Ally, which originally filed to go public in March 2011. The company, which provides car loans, bank accounts and other savings products, shelved the plan in June of that year until equity markets improved. CEO Michael Carpenter later said the bank had to resolve problems with its mortgage unit before restarting the process.
The company’s money-losing mortgage business entered bankruptcy in May 2012 and got court approval to end the process in December.
The U.S. stake in Ally, which was reduced in November to 64 percent from 74 percent, was cut to 37 percent in January when the government sold about $3 billion of common stock to private investors.
Third Point LLC, the hedge-fund firm led by billionaire Daniel Loeb, said in January that it amassed a 9.5 percent stake, making it one of Ally’s largest shareholders. Affiliates of Cerberus Capital Management LP own 8.6 percent, according to today’s filing.
Ally, known as GMAC when it was the finance arm of GM, won Federal Reserve approval to become a bank holding company in December 2008. The change enabled it to tap a U.S. rescue that swelled to $17.2 billion. Treasury said in a statement that it’s recouped $15.3 billion of that sum, not counting the IPO.