Ally to Delay IPO

Detroit-based Ally Financial Inc. has decided to delay an initial public offering because of weak market conditions, two people briefed on the matter said.

The mortgage and auto lender and bank holding company was expected to launch a road show ahead of an IPO planned before the July 4th holiday, reported The Detroit News.

The IPO could come in late July or early August, or be pushed until after the Labor Day holiday, when much of Wall Street returns from vacation, said the officials on Thursday. They asked for anonymity because the information had not been made public.

The U.S. Treasury Department plans to raise $5 billion as part of a $6 billion offering when Ally goes public. The Treasury Department owns a controlling 74 percent stake in Ally as part of the $17.2 billion bailout during the financial crisis.

The delayed IPO first was reported by the Financial Times.

Ally filed the paperwork March 31 in order to launch an IPO. Ally declined to comment Thursday night.

The Treasury is expected to sell some shares. Other owners such as General Motors Co., which holds a 9.9 percent stake in Ally, and Cerberus Capital Management LP, which holds a 9 percent stake, do not plan to sell shares.

Treasury has received about $4.9 billion in returns from Ally to date, including $2.2 billion in dividends and interest.

The company reported a $1.1 billion profit in 2010.

Citi, Goldman, Sachs & Co., J.P. Morgan and Morgan Stanley are advising Ally on its initial public offering.

With more than $172 billion in assets as of Dec. 31, 2010, Ally operates as a bank holding company.

Ally also has operations in mortgage and commercial finance, and the company's subsidiary, Ally Bank, offers retail banking products through its online arm.

Ally, which was known as GMAC Inc. until last year, was founded by GM more than 90 years ago as its in-house finance arm. It sold a 51 percent stake in the company in 2006 to Cerberus Capital Management LP in a $7.4 billion deal.

Ally said it raised its percentage of new car lending to 9.9 percent in 2010, up from 6.1 percent, to jump from third highest to the leading auto lender.

Bad market conditions could also delay other planned IPOs, including Troy-based Delphi, which filed for an IPO last month.