The auction of General Electric Co.'s business that lends money
for private-equity buyouts is nearing a climax, with several
bidders expected to submit final-round offers Thursday.
Canada's largest pension fund, Canada Pension Plan Investment
Board, as well as Guggenheim Securities and a number of
private-equity firms, are expected to submit offers, according to
people familiar with the matter. The private-equity bidders for the
business, which could fetch more than $17 billion, include Apollo
Global Management LLC, KKR & Co. and Ares Management LP, they
said.
A deal for the unit could be announced as soon as next week, the
people added.
GE in April announced its intention to sell roughly $200 billion
of banking operations. A sale of the so-called sponsor-finance
business would be a big step forward in that process, which the
industrial giant had said it aimed to complete within 24
months.
Last week, GE Chief Executive Jeff Immelt bumped up the
timeline, saying he expected to announce $20 billion to $30 billion
in additional sales by the end of June, and predicting the company
would be "largely done" with selling off the GE Capital businesses
by the end of the year.
At the time GE announced the broad retreat from banking, the
company inked a deal to sell a $23 billion real estate portfolio to
Wells Fargo & Co. and Blackstone Group LP. GE is also selling a
portfolio consisting of $74 billion of loans to U.S.
businesses.
GE Capital has long produced about half of GE's profits, but
lately the risks of operating what is essentially one of the
largest banks in the U.S. has rattled investors and weighed on the
company's shares.
GE's sponsor-finance business lends money for the buyout and
operation by private-equity firms of midsize companies. In all, the
business encompasses a bundle of more than 400 loans, the majority
below $100 million. The business consists of a team of about 300
people that originate new loans and manage the portfolio. GE is
eager for any buyer to absorb that group.
Some other bidders--such as foreign banks, sovereign-wealth
funds and insurance companies--are also expected to participate in
the final round of the auction, some of the people said.
GE, which enlisted J.P. Morgan Chase & Co. and Citigroup
Inc. to auction off the buyout-finance business, recently winnowed
the suitors from an initial round involving a dozen bidders.
Ben Dummett and Ted Mann contributed to this article.
Write to Dana Mattioli at dana.mattioli@wsj.com and Ryan
Dezember at ryan.dezember@wsj.com
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