Shares of AmeriCredit Corp. (ACF) spiked 22 percent to $24.09 in Thursday trading after General Motors said it would purchase in an all-cash transaction the subprime lender for $3.5 billion so it can lease more vehicles and increase sales to consumers with faulty credit records.
The automaker, which the U.S. government restructured in bankruptcy, plans to buy all of AmeriCredit’s stock at $24.50 per share — a 24% premium over Wednesday’s closing price of $19.70. The acquisition gives GM an in-house lending arm for the first time since it sold controlling stake in GMAC in 2006, making it easier for the carmaker to drive up its sales while competing for more market share.
“We’re in the fortunate position that we have a very strong balance sheet,” G.M.’s chief financial officer, Christopher P. Liddell, said in a statement. “That gives us the flexibility to do acquisitions like this.”
The transaction, which remains subject to approval by AmeriCredit shareholders, is expected to close in the fourth quarter.
Shares of AmeriCredit were up 21.70% to $23.98 Thursday morning. The stock had traded as high as $26.49 earlier this year.