Auction of GE's Private-Equity Loan Business Nears End -- Update

By Dana Mattioli And Ryan Dezember 

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 [e-mail] and Ryan Dezember at [e-mail]

Access Investor Kit for General Electric Co.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US3696041033

Subscribe to WSJ: http://online.wsj.com?mod=djnwires