General Motors is planning to sell a 9.9 percent stake in Ally Financial Inc., the auto lender majority owned by U.S. taxpayers, according to a person with knowledge of the transaction.
Selling now would allow GM to avoid a months-long lockup tied to Ally's initial public offering, according to the person, who asked to remain anonymous because the deal isn't public. The automaker also may seek to tap demand for Ally's shares after the lender's $1 billion private placement earlier this year was oversubscribed, the person said.
Ally, formerly known as GMAC, was once the in-house financing arm of GM. The pending sale was reported by the Wall Street Journal, which described the deal as a private placement valued at about $900 million.
GM's stake is held indirectly in an independent trust, according to the automaker's quarterly securities filing. The stake was required to be sold by Dec. 24 before the Federal Reserve granted a two-year extension in October. Both companies are based in Detroit.
Gina Proia, an Ally spokeswoman, and GM's Tom Henderson said their companies had no comment on the sale.