(Bloomberg) -- General Motors Co. and the U.S. Treasury may choose an underwriter as soon as next week for the automaker's initial public offering, two people familiar with the matter said.
GM, majority-owned by the U.S. government, must decide soon on a lead bank in order to sell shares publicly by the fourth quarter, said the people, who asked not to be identified revealing private information. The Treasury, which helped pay for the automaker's restructuring last year, probably will have more say than the automaker in the selection, the people said.
GM CEO Ed Whitacre has said the automaker may go public this year. GM needs to begin shortly to sell stock before the Nov. 2 congressional elections, said Joe Phillippi, president of AutoTrends Consulting in Short Hills, New Jersey.
“If they want to get it done in the fourth quarter, they have to start now,” he said in an interview. “This isn't some little tech company. It's a big story. This will be a global road show.”
Randy Arickx, a GM spokesman, said he wasn't aware of any imminent decision. Andrew Williams, a spokesman at the Treasury Department, didn't return telephone calls or an e-mail request seeking comment before the Memorial Day holiday weekend.
GM and Treasury officials met with senior executives from Goldman Sachs Group Inc., Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Morgan Stanley this month in Washington about hiring a lead underwriter, one of the sources said.
The banks fielded questions on their strategy for the IPO, including how much stock they recommend selling, how much GM may be worth and what obstacles may emerge along the way, a source said.
Whitacre wants to secure an automotive lending unit before a public offering in the fourth quarter, people familiar with the plan have said. GM hasn't had a captive finance company since former CEO Rick Wagoner sold 51 percent of GMAC in 2006 to private-equity firm Cerberus Capital Management.
Whitacre was installed as chairman by President Barack Obama's auto task force when it replaced more than half of GM's directors in July.
Choosing a lead underwriter in the next week or two would allow GM to file an S-1 initial registration form by July and sell shares in October or early November, one of the sources said.
The U.S. Treasury has hired Lazard Ltd. for $500,000 a month to advise on selling its 61 percent equity stake in GM, according to a document on the Treasury's Web site. The Treasury Department has about $40 billion of its $50 billion investment in GM tied up in equity.
Ron Bloom, currently chief of the U.S. auto task force, is a former Lazard vice president.
GM CFO Chris Liddell said earlier this month the automaker's $865 million first-quarter net profit, its first quarterly earnings since 2007, was a “good, useful step” on the way to an IPO that may come this year.
He also said at the time that it wouldn't be necessary to have a captive finance company before going public.
GM management has been preparing for an IPO so the automaker will be ready whenever the timing is right, said a GM executive who asked not to be identified discussing internal matters.