* GE shares up 3 percent in postmarket trading
* Stock positioned for highest open since October 2008
* Shareholders laud buyback plan
By Scott Malone
BOSTON, Feb 12 News that General Electric Co
is selling its remaining stake in NBC Universal to
Comcast Corp earlier than expected may be just what
the largest U.S. conglomerate needed to get out of the penalty
Its shares rose 3 percent in postmarket trading to levels
not seen in normal trading since October 2008 - when Chief
Executive Jeff Immelt was forced to cut GE's dividend and sell
additional shares amid fears that the financial crisis would
wreck the future of GE Capital and perhaps the whole company.
The NBC deal, worth $16.7 billion, is part of Jeff Immelt's
campaign to refocus the world's largest maker of jet engines and
electric turbines on its industrial roots, as it exits media and
scales back its GE Capital finance arm.
The company also said it would buy back $10 billion of its
shares this year - roughly 4 percent of its market
capitalization - and raise its total authorized stock buyback to
$35 billion from $25 billion.
If GE's shares trade above $23.18 on Wednesday, they will be
at their highest since October 2008. They passed that mark in
postmarket trading on Tuesday hitting $23.34.
During the depths of the financial crisis, GE shares had
dipped below $6.
"We have been looking forward to them moving away from that
NBC Universal, and this will give them more capital," said Mike
McGarr, a portfolio manager at Becker Capital Management in
Portland, Oregon, which holds GE shares. "In the end they will
get back to what GE used to be and probably with higher
The higher stock buyback will get Immelt closer to his goal
of reducing the company's total outstanding share count to its
level before the company sold $15 billion in additional shares
to investors including Warren Buffett's Berkshire Hathaway Inc
during the crisis.
GE executives have repeatedly said they do not anticipate a
repeat of the $11 billion wave of acquisitions the company
embarked on in 2010 and 2011 to bulk up in the energy sector,
which it funded with proceeds of the initial NBC deal.
"The core business that they have at the moment is fairly
solid," said Morningstar analyst Daniel Holland. "What I would
look for them to do is repurchase shares."
GE's initial 2010 deal to sell NBC Universal to Comcast had
given it the option of selling the rest of its holdings to the
No. 1 U.S. cable company in two stages, part in mid-2014 and the
balance by the end of 2017. GE officials had said they were
interested in selling the rest of the stake earlier rather than
LIVE FROM NEW YORK NO MORE?
In addition to the proceeds of selling the remainder of NBC
- a deal expected to close by the end of the first quarter, more
than a year earlier than investors had expected - GE is selling
NBC-occupied floors at 30 Rockefeller Center to Comcast for $1.4
Built as the RCA Building in 1933, the 70-story building is
the focus of the Rockefeller Center. It was renamed the General
Electric Building in 1988 after GE required RCA, which it helped
found in 1919. The building is home to the famous Rainbow Room
club restaurant. Tishman Speyer co-owns the building.
The floors GE is selling include the studio where "Saturday
Night Live" is produced, where Immelt and his top lieutenants
have conducted the company's annual December outlook meetings.
GE spokesman Seth Martin declined to comment on where GE would
hold this year's meeting.
Immelt, who has run GE since 2001, has repeatedly emphasized
to investors that the company would have a lot of cash to deploy
in the coming years, reflecting both the NBC deal and Federal
Reserve approval last year for GE Capital to resume paying a
share of its profit back to the parent company.
"This company is going to have a ton of cash over the next
three years," Immelt told investors in January. Immelt is
scheduled to discuss the deal on a conference call Wednesday
Oliver Pursche, president of Gary Goldberg Financial
Services, which holds GE shares, said the higher buyback was
"Additional share buybacks are likely to be positive for
shareholders," Pursche said. "The M&A space right now has gotten
a little expensive."