GE Share Sale Raises $12.2 Billion at 9.2% Discount (Update2)
By Sarah Thompson and Rachel Layne
Oct. 2 (Bloomberg) --
General Electric Co. raised $12.2 billion by selling 547.8 million shares at a discount of 9.2 percent to yesterday's closing price, giving it more cash to fund operations in the worst U.S. financial crisis since the Great Depression.
The shares were priced at $22.25 each, Fairfield, Connecticut-based GE said in a statement today. GE fell $2.28 to $22.22 at 11:04 a.m. in New York Stock Exchange composite trading and was the most actively traded stock in U.S. markets. GE stock hasn't closed below today's offer price since February 2003.
Combined with a $3 billion in preferred shares from
Warren Buffett's Berkshire Hathaway Inc., in a separate deal announced yesterday, Chief Executive Officer
Jeffrey Immelt raised $15.2 billion. The total may reach $17 billion if an over-allotment of shares is exercised by the offering's lead underwriter, Goldman Sachs Inc., spokesman
Gary Sheffer said.
The offering plus the preferred sale to Berkshire is ``at the high end of expectations, and we are pleased with the results,'' Sheffer said in an interview today.
The sale dilutes the value of GE stock by about 6 percent to 7 percent, Citigroup analyst
Jeffrey Sprague said in a note to investors yesterday. He rates GE a ``hold/medium risk.'' ``While this was clearly a difficult step to take, it should give GE more operating and strategic flexibility,'' Sprague said in his note.
Buffett Shares
Buffett's preferred shares will pay an annual 10 percent dividend and are callable after three years at a 10 percent premium. GE's stock through yesterday
tumbled 34 percent in New York trading this year.
GE and Immelt, 52, told investors as recently as Sept. 25 there was no need for outside capital, including selling a large equity stake to an outside entity. Immelt that day reduced his annual profit forecast for the second time this year.
He also suspended a $15 billion buyback program, shifting capital to protect GE's dividend and AAA credit rating as volatility in credit markets reduced profit at its finance arm, GE Capital.
In addition to Goldman, leading bookrunners included America Corp., Citigroup Inc., Deutsche Bank AG, JPMorgan Chase & Co. and Morgan Stanley. Barclays Plc, Credit Suisse Group AG and UBS AG.
Forse anche questo contribuisce a spiegare il ritracciamento di oggi
per me se istato di esempio di tranquillità operativa....
