General Electric Company (NYSE:GE) announced today that it has completed the previously announced sale of its U.S. Sponsor Finance business and a bank loan portfolio, representing aggregate ending net investment (ENI) of approximately $10 billion, to Canada Pension Plan Investment Board (CPPIB) in a transaction valued at more than $11 billion.
“We are excited to complete the sale of Sponsor Finance to CPPIB,” said Keith Sherin, GE Capital chairman and CEO. “As one of the first major closings in this process, it is an important milestone as we continue to execute on our plan to sell most of the assets of GE Capital,” added Sherin.
As previously announced, GE is embarking on a strategy to focus on its high-value industrial businesses and is selling most GE Capital assets. GE and its Board of Directors have determined that current market conditions are favorable to pursue disposition of these assets. GE will retain the financing “verticals” that relate to GE’s industrial businesses.
The Sponsor Finance transaction closes at a valuation consistent with signing and, as expected, releases approximately $2.5 billion of capital. GE Capital believes it is on track to deliver about $35 billion of dividends to GE under this plan, as previously announced (subject to regulatory approval). Changes in the transaction size were driven by normal portfolio seasonality and pay-off in the bank loan portfolio during the sign to close period.
Mr. Sherin concluded, “We wish our Sponsor Finance team a successful future as they join CPPIB and grow the business under the new owner.” (Original Source)
Shares of General Electric closed today at $24.59, down $0.60 or 2.38%. GE has a 1-year high of $28.68 and a 1-year low of $23.41. The stock’s 50-day moving average is $26.22 and its 200-day moving average is $26.13.
On the ratings front, General Electric has been the subject of a number of recent research reports. In a report issued on July 20, UBS analyst Shannon O’Callaghan reiterated a Buy rating on GE, with a price target of $32, which implies an upside of 30.1% from current levels. Separately, on June 26, William Blair’s Nicholas Heymann reiterated a Hold rating on the stock and has a price target of $30.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Shannon O’Callaghan and Nicholas Heymann have a total average return of 16.8% and -0.4% respectively. O’Callaghan has a success rate of 79.5% and is ranked #116 out of 3738 analysts, while Heymann has a success rate of 33.3% and is ranked #2610.
Overall, 3 research analysts have assigned a Hold rating and 4 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $33.00 which is 34.2% above where the stock opened today.