General Electric Company (NYSE:GE) has reached an agreement to sell GE Capital’s Commercial Lending and Leasing portfolios in Australia and New Zealand (A&NZ) to Sankaty Advisors, the global credit affiliate of Bain Capital, advised and partially financed by Deutsche Bank. The transaction includes about US$1.7/A$2.4 billion in ending net investment (ENI). Terms of the transaction were not disclosed.
During the past eight months, GE Capital has signed agreements to sell four A&NZ consumer and commercial financing businesses, including today’s transaction. All transactions are expected to close by the end of the first quarter of 2016, subject to customary regulatory and closing conditions.
“Combined, these transactions total about US$9/A$12.6 billion of ENI, and when closed, will complete the sale of all of GE Capital’s businesses in A&NZ,” said Keith Sherin, GE Capital chairman and CEO. “Thanks to the remarkable effort of our team, we developed great customer relationships in the market. Our presence has served as an important part of GE and delivered great results for over 20 years.”
As previously announced, GE is executing on a strategy to create a simpler, more valuable company by reducing the size of its financial businesses through the sale of most GE Capital assets and by focusing on continued investment and growth in its world-class industrial businesses. GE will retain the financing businesses that relate directly to GE’s industrial businesses.
When completed, today’s transaction will contribute approximately US$0.1 billion of capital to the overall target of approximately US$35 billion of dividends expected to be paid to GE under the disposition plan (subject to regulatory approval).
Sherin added, “We continue to make strong progress in our efforts to reduce the size of GE Capital. To date, we have signed agreements to sell approximately US$128 billion of GE Capital, more than 60 percent of our overall plan.”
Today’s transaction for the Commercial Lending and Leasing portfolios is expected to close in the fourth quarter, subject to customary closing conditions. Morgan Stanley provided financial advice and King & Wood Mallesons and Minter Ellison provided legal advice. (Original Source)
Shares of General Electric closed last Friday at $29.92. GE has a 1-year high of $29.95 and a 1-year low of $19.37. The stock’s 50-day moving average is $27.68 and its 200-day moving average is $26.48.
On the ratings front, General Electric has been the subject of a number of recent research reports. In a report issued on October 19, Stifel Nicolaus analyst Robert McCarthy reiterated a Buy rating on GE, with a price target of $30, which represents a slight upside potential from current levels. Separately, on the same day, UBS’s Shannon O’Callaghan reiterated a Buy rating on the stock and has a price target of $32.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Robert McCarthy and Shannon O’Callaghan have a total average return of 1.8% and 15.6% respectively. McCarthy has a success rate of 55.6% and is ranked #2015 out of 3829 analysts, while O’Callaghan has a success rate of 81.0% and is ranked #104.
Overall, 2 research analysts have assigned a Hold rating and 7 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 $31.25 which is 4.4% above where the stock closed last Friday.