Report: GM Mulling Bids for Financing Arm

General Motors Corp. (GM) is considering a bid of $12.5 billion to $13 billion for a majority stake in its financing arm from a group led by New York private-equity firm Kohlberg, Kravis & Roberts and some banks, The Wall Street Journal reported Wednesday.

The newspaper said the nonbinding bid for the stake in General Motors Acceptance Corp. gives the automaker another option to what had been considered the leading bid from Cerberus Capital Management, a private-equity and hedge fund group.

But the Journal, citing unidentified people familiar with the offers, said GM is cool to the new proposal from the KKR group due to some of its fine details, and could decide against selling to either group.

Instead, the newspaper said GM could sell off GMAC's home mortgage and insurance operations while keeping the auto-financing arm.

Joanne Krell, a spokeswoman for GMAC, said she had no comment on the report, and a message seeking comment was left Wednesday with GM spokesman Jerry Dubrowski.

The automaker wants to sell a stake in GMAC in part to improve the finance division's ability to borrow money by separating its debt rating from the non-investment, or junk, rating that has been assigned to parent GM. Some major investors are prohibited from buying securities that carry a high-risk rating.

GM's board is expected to convene in about two weeks to evaluate plans for GMAC.

The Journal report said KKR has recruited help in its bid from Wachovia Corp. (WB), Merrill Lynch & Co. (MER), General Electric Co. (GE) and Bank of Nova Scotia.