It's been over a month since the initial round of bidding for GMAC occurred, and yet there has been no apparent movement on this transaction. What's going on?

MarketWatch's David Wiender has a theory - GM appears to be looking for a deal that will allow it to buy back GMAC at a later date. The larger banks on Wall Street are viewing this as a veiled attempt at soliciting a bailout, and aren't really interested in bankrolling GM's recovery. It ends up being a lose/lose proposition - if GM survives, the buyer would have to surrender its interest in GMAC; if GM dies, it's likely that GMAC would be greatly affected. GM is also offering up only a majority stake in GMAC, which will not allow the buyer to fully integrate the finance company into its own operations. This, combined with the $10-15B price tag for the deal, has greatly limited the number of buyers.

An interesting side note to this story is that GM's borrowing activities have generated $1.75B in fees over the last five years, and $277M last year alone. Hey, a few hundred million here and there, and all of a sudden we're talking about real money.

 


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