In co-ordinance with plans to move forward with the reshaping of GEs financial arm through reducing credit risks and focusing on core industrial business, General Electric (GE) has filed an initial public offering (IPO) of their North American retail finance unit.
Expected to be closed by late 2014, (NYSE: GE [FREE Stock Trend Analysis]) 20% of the GE North American consumer lending unit (operated under the name “Synchrony Financial”) will be traded on the New York Stock Exchange under the symbol SYF. The stock value remains undisclosed at this time.
“The retail business supplies store credit cards and financing for sales on credit used by 55 million Americans at retailers such as Wal-Mart Stores Inc. WMT -0.87% and Gap Inc.’s GPS +1.96% Banana Republic.
The company GE -0.91% outlined plans in November to exit the retail lending business — the conglomerate’s most aggressive move yet to shrink the size of its financing arm, which still generates half its profit.
It said at the time that it would file for an initial public offering in the first quarter to sell 20% of the unit to raise cash to better capitalize the stand-alone operations. GE expects to split off the business next year by distributing the rest of the stock to GE’s shareholders.
Analysts at Bernstein Research estimated last year that the retail business could have a market value of $18 billion to $20 billion. In comparison, credit-card companyDiscover Financial Services has a market capitalization of about $28 billion.
In its regulatory filing, Synchrony said its 2013 profit was $1.98 billion, down from $2.11 billion in 2012.
GE expects to complete the IPO later this year. It applied to list its shares on the New York Stock Exchange under the symbol SYF. The company hasn’t yet set the number of shares or expected price range of the offering.”
Read more on GE Files IPO: http://www.benzinga.com/d14/03/4393056/ge-files-ipo-for-finance-arm-spin-off-analyst-blog#ixzz2wAakpFRf
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