Ally IPO of Up to $10 Billion Could be Just Months Away
Ally Financial, which hired a group of four Wall Street underwriters Thursday, has become the latest government-owned entity to take firm steps toward an initial public offering.
The auto-financing company, formerly known as GMAC, asked Citigroup, JP Morgan, Morgan Stanley and Goldman Sachs to be the lead bankers on an IPO, say people familiar with the matter.
Because Ally hasn’t yet filed registration documents with the Securities and Exchange Commission, a deal is unlikely to come for two months, this person said.
Ally, which is three-quarters owned by the U.S. Treasury, plans to sell between $5 billion and $10 billion of stock in the initial deal, people familiar with the matter have said.
Exact sizing, according to one of these people, will depend on market conditions and pricing at the time of the deal but it's so early in the process, said another one of these people, that detailed discussions haven't yet been held about deal size with the banks.
The large cast of underwriters makes Ally the second major potential issuer in recent weeks to award its IPO “mandate,” or banking role, to four different Wall Street firms.
One possible reason for the large number, two people familiar with the matter said, is that as newly-restructured private entity, companies like Ally are eager to cement their relationships with a wide array of banks and the institutional investors they know as they sell a large tranche of shares to the public.
American International Group, the large insurer that hired four underwriters for its soon-to-be launched "re-IPO," was of the same mentality, people familiar with that matter have said.
Although AIG is already publicly traded, its float of shares is relatively small, one of these people has said, and the company has undergone a period of such dramatic asset-shedding and revamping that a good deal of investor education will be required as part of the offering.