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SAN ANTONIO (Reuters) - Shares of General Motors Co GM.UL are likely to be priced between $20 and $25 in the initial public offering by the automaker in November, Chairman Ed Whitacre said on Wednesday, a move that would make its shares more attractive to retail investors.
Whitacre's comments represented the first time that GM has commented on the issue.
A GM IPO price in that range would come through a stock split intended to make shares in the top U.S. automaker more attractive to the individuals expected to represent up to a quarter of its initial investor base.
"It's a little too early to say, but it is going to be somewhere in the $20 range ... $20, $25, something like that would be my guess," Whitacre said when asked what the price of the GM stock should be in the IPO.
"It's a little too early to tell, but somewhere in there," he said in response to a question from Reuters after a business event honoring him near his home in San Antonio.
Bankers familiar with preparations for the GM IPO have said that the automaker would conduct a share split in order to price the stock low enough to attract retail investors.
Sources with knowledge of the developing deal have said that price was likely to be near the $20 to $25 range.
A pitch to retail investors is expected to be a major focus of the GM IPO, although the automaker and its advisers have been barred from discussing those preparations because of U.S. securities regulations.
Earlier this week, GM extended a deadline for its roughly 600,000 workers and retirees in the United States and Canada to register to buy shares in the IPO.
About 25 percent of GM's shares are expected to be allocated to retail investors, sources have previously told Reuters. Allocating 20 percent of an IPO to retail investors is typical for such deals.
Whitacre said he could not say how large the GM IPO would be but predicted it would be successful in reducing the U.S. government's 61 percent stake in the top U.S. automaker.
GM was restructured in a bankruptcy funded by the Obama administration and given $50 billion in U.S. taxpayer funding.
"I can't say how much we'll sell, but I can say we'll have a successful IPO sometime in November," Whitacre said. "It's going to work and it was absolutely the right thing to save this company."
GM needs to have a market valuation of about $67 billion if U.S. taxpayers are to break even on the common stock the Treasury still holds. That excludes the $2.1 billion in preferred stock also held by the government.
An IPO price of just above $20 per share for GM would imply a roughly 6-for-1 stock split ratio.
Before a split, GM shares would have to price at $133.78 per share for U.S. taxpayers to recoup the $40 billion invested in the automaker's common stock, according to an estimate prepared by Neil Barofsky, inspector general for the government's Troubled Asset Relief Program.
Whitacre, who was replaced by Dan Akerson as GM chief executive on September 1, said he had stepped down from the top management post because he had not been prepared to stay on to lead the company's turnaround effort over the longer term.
"Had I stayed through the IPO, I would have had to stay a long time," Whitacre said. "Investors are going to buy the management of the company, as well as the cars they make. I was not prepared to stay another few years, so it is time for me to do it now."
Whitacre, 68, acknowledged that there had been "a lot of speculation" about his health, but said that had no role in his decision. "I'm fine," he said.
A former CEO at AT&T (T.N), Whitacre had been a vocal critic of GM's bureaucratic decision-making process and a culture that he saw as more focused on memos and meetings than making great cars.
But he said he believed that changes he instituted in his nine-month term as CEO would stick.
"I think we have new leadership at GM. They're enthused, and I think it will stick," he said. "This is a very good management team, very good employees and I don't think it will ever go back to the way it was."
Whitacre, who has been driving a Cadillac CTS-V, said he expected to take delivery of one of the first Chevy Volts available next week.
The Volt, which is designed to travel up to 50 miles under battery power alone, represents an effort by GM to win back a reputation for innovation and win over the kind of affluent car shoppers that have been drawn to the Toyota Prius.
"I plan to drive the first one right here in San Antonio," Whitacre said.
Reporting by Jim Forsyth, writing by Kevin Krolicki; editing by Matthew Lewis, Gary Hill, Phil Berlowitz