Bids May Be Near for GMAC

Published reports say Citigroup and Wachovia are part of separate groups considering offers.
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Citigroup

(C) - Get Report

and Cerberus Capital Management are working together on a proposal to acquire a majority interest in General Motors Acceptance Corp., the finance division of

General Motors

(GM) - Get Report

, according to published reports.

Bloomberg

and the online edition of

The Wall Street Journal

reported on the potential plan Saturday, both citing people who had knowledge of the situation.

The

Journal

indicated that GMAC has been valued at around $11.5 billion. The

Bloomberg

report said the group with financial-services giant Citi and hedge fund Cerberus could offer $11 billion to $15 billion for the GM unit.

Both reports also said

Wachovia

(WB) - Get Report

and private-equity firm Kohlberg Kravis & Roberts are part of a separate group considering a bid for a majority GMAC stake.

GM said last year that it would try to sell part of its mortgage and insurance unit. GMAC is the most profitable part of the world's biggest automaker, but GM has said a sale would protect its unit's credit rating and access to financing.

Speculation about a possible bankruptcy at GM has come up regularly in recent months. In 2005, the company's stock lost nearly 50% of its value, and GM suffered staggering losses on its financial statements. Legacy and health care expenses have pummeled the company, and it's credit ratings have been cut to junk status.

Last week, GM said it lost $4.8 billion, or $8.45 a share, in the fourth quarter, its fifth-straight quarterly loss. The results included charges of $3.6 billion. Excluding items, GM still would have lost $1.2 billion. GMAC had a quarterly profit of $614 million.