STAMFORD, Conn. – GE Capital, the huge finance arm of conglomerate General Electric Co.,said Monday it plans to buy Heller Financial Inc. for about $5.3 billion in cash -- a 50 percent premium over the company's closing stock price -- in an effort to expand its sizable commercial-finance operations.
Japan's Fuji Bank Ltd., which owns 52 percent of Heller and controls about 77 percent of the voting power, said in a statement that it has agreed to sell its stake to GE Capital. Fuji is a subsidiary of top Japanese bank Mizuho Holdings Inc.
The purchase of Chicago-based Heller is likely to be viewed as a nice reward for GE Capital after two major failed recent deals. The Stamford, Connecticut, company earlier this year was unable to entice executives of CIT Group Inc. and creditors of Finova Group Inc. into deals, and both companies ended up in the arms of competitors.
GE said it is offering $53.75 a share, 50 percent more than Heller's Friday New York Stock Exchange price of $35.90 and well above the 52-week high of $40.78 reached July 3.
The Heller acquisition would sit well with General Electric who recently suffered a major defeat when European antitrust regulators blocked its $43-billion deal to buy diversified manufacturer Honeywell International Inc. .
But GE may need to cross paths with European antitrust regulators again, as the Heller deal is likely to require regulatory approval there. Heller's overseas operation isn't that large, however, and the deal is expected to go through.
In Friday New York Stock Exchange trade, GE shares closed up 90 cents to $44.65, the lower end of a 52-week range of $36.43 to $60.50.