CORRECTED-UPDATE 2-GM investor seeks board seat, $8 bln stock buyback
(Corrects to make clear that the Canadian federal government still owns a stake in GM, instead of that the province of Ontario's sale of GM shares ended any government ownership of the automaker, last paragraph)
By Ben Klayman
DETROIT Feb 10 (Reuters) - Chief Executive Mary Barra's plan to keep a big cash cushion for General Motors Co is under attack from a group of shareholders led by a member of the auto task force that helped restructure the company during its 2009 bankruptcy.
Harry Wilson, who was a member of the task force, notified the Detroit automaker on Monday that he wanted it to spend $8 billion to buy back shares, and that he will nominate himself for election to the board of directors this spring. GM, which has 13 people on its board, disclosed the letter on Tuesday.
"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 his letter.
GM shares were up 2.3 percent at $36.82 in late morning.
Wilson, 43, said he had joined with David Tepper's Appaloosa Management and three other hedge funds: Hayman Capital Management, Taconic Capital Advisors and HG Vora Capital Management, which together own about 34.4 million shares, or 2.1 percent of GM stock.
Wilson, who last May called GM's shares "woefully undervalued," will receive a percentage of the group's profit from their investment in the company.
While GM reiterated that it acts in the best interests of shareholders, the plan launched by Wilson and the funds is a direct challenge to the company's board. The company declined to make any executives or the chairman, Tim Solso, available to comment. Continued...