US: GM investor mulls board participation and $8 billion stock buyback image

Chief Executive Mary Barra’s current management strategy has been under fire recently from a group of shareholders led by a member of the government-sanctioned task force that helped the company restructure after the 2009 bankruptcy.

CEO Mary Barra has envisioned a strategy where the largest US automaker has a big cash reserve but now Harry Wilson, the former member of the task force, announced on behalf of the represented shareholder group that the Detroit carmaker should proceed to buy back shares worth $8 billion. He added that he is ready to nominate himself for election to the automaker’s board of directors during the next shareholder meeting set for this spring. “The company’s common stock is substantially undervalued, the company is substantially overcapitalized and this repurchase of undervalued shares will create substantial shareholder value,” Wilson said in a letter sent to the current 13-people board of directors.

Wilson, 43, joined forces in the bid with David Tepper’s Appaloosa Management and three other hedge funds: Taconic Capital Advisors, Hayman Capital Management and HG Vora Capital Management. They jointly hold around 34.4 million shares, or 2.1 percent of current GM stock. Wilson wants to nominate himself as a candidate for the board at the 2015 annual shareholders’ meeting in a bid to see through the share buyback program within 12 months. Barra has recently come under pressure to return to shareholders some of the company’s $37 billion in liquidity, which includes $25 billion in cash. General Motors last week announced it would raise the quarterly dividend by 20 percent and boost the capital spending plans for 2015 by another 20 % to $9 billion.

Via Reuters