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Komfie Manalo, Opalesque Asia:

General Motors has effectively averted a possible showdown with hedge fund investors as the Detroit, Michigan-based car maker announced a $5bn stock buyback as part of a plan to return more cash to investors, reported the LA Times.

With the move, GM’s activist shareholders, including David Tepper and Kyle Bass’ Hayman Capital, Taconic Capital and HG Vora Capital, which own a combined 2.1% of the company’s shares, have agreed to drop a potentially divisive showdown for a seat on GM’s board.

Harry Wilson, a former hedge fund manager and retired banker who helped the Obama administration restructure GM as part of the government's auto industry task force and a representative of the four hedge fund investors, earlier pressed GM to issue an $8bn buyback and a seat on GM’s board. The hedge funds and Wilson have accused GM of hoarding cash that is not in the best interest of the firm’s shareholders.

"We basically said thank you," Wilson said and added he was impressed with the swiftness of the GM’s management in responding to their concerns.

Last month, Tepper’s Tepper of Appaloosa Management echoed his support to push Wilson on GM’s board seat and pressed the car maker to repurchase some of its shares. Wilson ......................

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