DETROIT -- General Motors Corp. said yesterday that it would issue 25 million new GM class H shares and use the proceeds to pay for its previously announced acquisition of General Dynamics Corp.'s missile business.
The stock sale might also generate some fresh capital for GM, depending on demand for the stock and its price when the offering takes place. In composite trading, GM's class H stock closed at $23.375 yesterday, down $1.125 a share, on volume of 86,300 shares.
Class H, one of three classes of GM common stock, gives holders the right to receive dividends from GM Hughes Electronics Corp., a GM subsidiary, based on the subsidiary's profits.
But the automaker, not the shareholders, owns the subsidiary. Similarly, GM's class E stock is tied to the performance of Electronic Data Systems Corp., its computer services business. GM's regular common stock relates to the principal automotive business.
The automaker, which has suffered enormous losses, is trying to direct its scarce capital to core activities, like the development of new vehicles. The missile business is meant to complement military businesses owned by GM's Hughes Aircraft.
"GM has other places it needs to be putting its capital," said Stephen Girsky, automotive analyst for Paine Webber in New York.