A member of President Barak Obama's team that helped restructure General Motors and Chrysler has announced that he will nominate himself for a seat on the board of GM and propose an $8 billion stock buyback.
Harry Wilson told GM that he is acting in concert with David Tepper's Appaloosa Management, Hayman Capital Management, Taconic Capital Advisors and HG Vora Capital Management, which own approximately 34.4 million shares together, or 2.1 percent of the company's common stock, GM said in a statement on Tuesday.
GM has 13 people on its board currently. Though the Detroit automaker said once again that it acts on the best interests of its shareholders, Wilson's plan is a direct challenge to the company's board.
"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 to GM.
Wilson, 43, who called GM's shares "woefully undervalued," last May, will receive a percentage of the group's profit from their investment in the automaker.
Wilson plans to nominate himself for candidacy for the board during the 2015 annual shareholder's meeting, according to his letter. He will offer a proposal to complete the share buyback program sometime during 2015.
GM usually holds its shareholder's meeting in June, according to Reuters. Wilson said he might nominate additional people up for election this year as well, though nothing has been decided yet.
The Detroit automaker has been pressured recently to return some of its $37 billion in liquidity, including $25 billion in cash, to shareholders. In its statement, GM said its board's corporate governance committee will look over the proposal and "make a recommendation based on the best interests of all shareholders."
"The GM Board of Directors and management team are committed to acting in the best interests of all shareholders and are always open to constructive ideas to enhance shareholder value," the statement said. GM's management team is successfully executing a plan that is continuing to build a strong and sustainable business for the long term."
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