Industrial conglomerate General Electric Co. priced its sale of shares in oilfield services provider Baker Hughes a GE company at $21.50 per share, for estimated proceeds of $2.47 billion.
The secondary offering of Baker Hughes class A shares by General Electric, with its affiliates GE Oil & Gas US Holdings I Inc., GE Holdings (US) Inc. and GE Oil & Gas US Holdings IV Inc., would result in the companies no longer owning more than 50% of the voting power of all classes of Baker Hughes' voting stock.
Underwriters will have a 30-day option to buy up to 17.25 million additional class A shares, according to a Sept. 11 release. GE raised the total amount of shares to be sold, which was previously announced at 105 million shares, and the underwriters' overallotment option, which was previously at 15.75 million shares.
Baker Hughes will also repurchase 11,865,211 of its class B shares, along with an equal number of associated membership interests of Baker Hughes a GE company LLC from one or more of GE and its affiliates in a private deal. The purchase price for the class B shares will be equal to the price per class A share the underwriters will pay in the secondary offering.
The sale would also cut the number of Baker Hughes board members GE is allowed to designate to one, from five. GE informed Baker Hughes that John Rice would remain on the Baker Hughes board as its designee. Lorenzo Simonelli and W. Geoffrey Beattie would also remain as board directors, but not as GE designees. Jamie Miller and James Mulva would resign from the board.
Baker Hughes is not offering any class A shares and will not receive any proceeds. The offering is scheduled to close Sept. 16.
J.P. Morgan, Citigroup, Goldman Sachs & Co. LLC and Morgan Stanley are acting as joint lead book-running managers for the secondary offering, while Bank of America Merrill Lynch, BNP Paribas and Evercore ISI are acting as joint book-running managers.
