General Electric Co. in Fairfield, Conn., announced Monday that it plans to sell up to 82 million class A common shares of Genworth Financial Inc., its insurance spinoff, through a secondary public offering and a sale to Citigroup Global Markets Inc.
Concurrently, the spinoff may repurchase directly from GE between $400 million and $500 million of Genworth class B common stock at the net price GE receives in the secondary offering. The repurchase would be simultaneous with and contingent on the closing of the secondary public offering.
GE will use the proceeds to eliminate parent-supported debt at GE Capital and enable GE Capital to increase the dividend it pays to GE from 10% of its earnings to 40%, starting in the second quarter.
GE sold 30% of Genworth's common stock in a $2.86 billion initial public offering last May. On completion of the plans announced Monday it would own about 51% of Genworth's common stock, if the underwriters' overallotment option were exercised in full. GE said it expects Genworth to be fully independent in two years.
