Einhorn Ratchets Up His Pressure on GM -- Update

By Anne Steele 

Investor David Einhorn escalated his pressure on General Motors Co., nominating three candidates Wednesday to the Detroit auto maker's board of directors.

In a public filing, Mr. Einhorn's hedge fund Greenlight Capital Inc., which is pressing GM to create two classes of common stock that would separate its dividend from its operations, said the nominees are needed "to help re-energize the board and bring additional focus to closing the valuation gap in GM's stock."

GM has rejected the stock-split proposal, saying it "creates an unacceptable level of risk," including the potential loss of its investment-grade credit rating. The auto maker said Wednesday its evaluation of the proposal remains unchanged. All three major ratings firms last month issued reports on the Greenlight proposal saying it would be credit-negative to GM and could lead to a downgrade.

GM said credit-rating firms' public statements on the Greenlight proposal "clearly indicate that they understood the idea in all its facets."

Mr. Einhorn has been pressing GM as he seeks to invigorate a stock that has languished despite climbing sales and profits. His theory is that two classes of stock would attract new yield-hungry investors and those looking for growth.

Greenlight named as candidates Leo Hindery Jr., managing partner of InterMedia Partners and former chief executive of Tele-Communications Inc., Liberty Media and AT&T Broadband; Vinit Sethi, partner and director of research at Greenlight; and William N. Thorndike Jr., founder of private-equity investment firm Housatonic Partners and chairman of Consol Energy.

GM shares were up 0.2% Wednesday morning.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

April 12, 2017 10:55 ET (14:55 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.