GE plans to raise $3.5bn in Synchrony IPO
General Electric plans to raise as much as $3.5bn (about €2.5bn) in the initial public offering of its North American consumer-lending business, now called Synchrony Financial, sources told Bloomberg.
At that size the IPO would be the largest by a US company since Facebook raised $16bn in May 2012. Fairfield, Connecticut-based GE declined to comment on details of the offering. The size of the deal may change based on investor demand for the shares. GE, which filed for an IPO of the business yesterday, will seek a valuation of $20bn and $25bn in the sale, sources added. GE has said it expects to complete the IPO this year and that as much as 20pc of the unit will be spun off.
The sale comes amid high demand for consumer-finance companies after the industry raised $10bn through equity offerings last year, the most since before the financial crisis.
Consumer-finance companies with more than $1bn in market capitalisation, including Visa and Western Union, trade at a median of 13.6 times earnings, data compiled by Bloomberg show. Divesting the consumer-finance arm for retailers such as Wal-Mart and JC Penney, bolsters CEO Jeffrey Immelt's bid to boost the share of earnings from units making industrial goods. (Bloomberg)