March 8, 2015 — The Wall Street Journal is reporting that General Motors will lay out Monday its plans to return billions to shareholders in a more aggressive timetable than originally planned. The move is part of an agreement with activist investor Harry Wilson who has agreed to not pursue a board seat.
The amount GM intends to pay to shareholders in a share buyback was not disclosed in the article but could be announced Monday.
The deal is important because it helps GM avoid what could have been a painful proxy fight with Wilson for a board seat. It also indicates Wilson is only interested in boosting the value of the stock instead of forcing GM into significant changes. Wilson was one of the main architects of the GM and Chrysler bankruptcies in 2009 and is credited (or blamed) by insiders as the one who pushed for the dealer terminations. (Does Wilson have Other Plans for GM?)
GM has more than $25 billion cash right now. It sounds like a lot, but looming fines from its failed ignition debacle along with what will likely be huge legal settlements for victims, will put significant pressure on that total.