GE Makes an Offer for Sanyo Electric Credit, Goldman to Cash Out

The consumer finance arm of General Electric will make a $1.14 billion cash tender offer for Sanyo Electric Credit -- starting Monday and ending May 9. At ¥3,250 a share, it represents a 62% premium over today's close of ¥2,010. GE is aiming to buy at least a two-thirds stake valued at approx. ¥90.14b ($767m). Sanyo Credit said it has agreed to the offer. Goldman Sachs is its largest shareholder, with a 33.2% stake. It originally owned 42% following its investment to help bail out Sanyo Electric last year, the latter which still owns a 17% stake and has not decided whether to accept GE's offer. Bloomberg reports Goldman is set to make ¥43b ($366m) from its ¥24b investment. A GE Japan executive commented, "We have been looking for the right opportunity to expand our finance business in Japan. Sanyo Credit is involved in small-lot leasing for smaller companies and this will allow us to expand our customer base."

Sources: Bloomberg, Reuters
Commentary: General Electric: A Winner in the Mid-Cycle Slowdown • Goldman on GE: Now is Prime Buying Opportunity • GE, Blackstone to Acquire PHH Corp for $1.8B in Cash
Stocks/ETFs to watch: General Electric (GE), Sanyo Electric Credit (JP:8565), Goldman Sachs (GS), Sanyo (SANYY.PK). Competitor: NIS Group (NIS). ETFs: streetTRACKS Dow Jones Global Titans Index Fund (DGT), iShares Dow Jones US Industrial (IYJ), S&P 500 Index SPDRs (SPY)

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