GM Considers Bid from KKR
Wed, 03/15/2006 - 2:18am
General Motors is considering a bid of $12.5 billion to $13 billion led by New York private-equity firm Kohlberg, Kravis & Robers for the financing division, General Motors Acceptance Corp. (GMAC) according to a report from the Wall Street Journal.The non-binding bid provides GM with another option to the previous high bid from Cerberus Capital Management, a private-equity and hedge fund group. Citing sources familiar with the offer, the Journal reports that GM is cool to the proposal due to the details of the offer and the ability for the group to back out. GMAC earned $2.8 billion last year, eve as GM's auto operations lost money. The automaker wants to well a stake in GMAC in part to improve the finance division's ability to borrow money by separating its debt rating form the non-investment rating it has been assigned. GM's board is expected to meet in approximately two weeks to evaluate plans for GMAC.