* General Electric's Swiss unit sets share sale price range
* Each share to be priced between 43 and 51 Swiss francs
* Eyes market cap of up to 1.53 bln Swiss francs
* Listing planned for Oct. 30
ZURICH, Oct 16 General Electric's
flotation of its GE Money Bank is expected to value the Swiss
consumer finance business at up to 1.53 billion Swiss francs
($1.67 billion), in a further step in the U.S. firm's retreat
from the finance sector.
GE Money Bank expects to raise up to 1.05 billion Swiss
francs from the share sale it said on Wednesday, in what will be
Switzerland's first flotation in a year.
GE Capital, a subsidiary of General Electric, plans to sell
up to 18 million shares, or 60 percent of Zurich-based Money
General Electric has said it aims to shift its earnings mix
to 70 percent industrial and 30 percent financial. The company
has already sold its consumer credit business in Austria and
Germany to Spanish bank Santander.
GE's banking business, GE Capital, which has a consumer
finance and banking business specialised in credit cards,
personal loans, auto financing and savings, contributed 45
percent of GE's earnings in 2012.
Money Bank said it expects to price each of the shares in
the sale, planned for Oct. 30, at between 43 and 51 Swiss francs
for a market capitalisation of up to 1.53 billion Swiss francs.
Shares in financial services peers, such as Close Brothers
, Provident Financial or Capital One,
trade at an average of around 12 times estimated forward
earnings, according to Thomson Reuters data.
Money Bank's targeted pricing will put its price/earnings
multiple at around 11 times, thus giving a discount of around 10
Money Bank, which will change its name to Cembra Money Bank
at the sale, is aiming to entice investors by proposing a
dividend equivalent to between 5 and 7 percent of its share
"If you are looking for a stock with a yield of 5 percent,
then you can't go wrong here," one fund manager told Reuters. "I
think it's an interesting alternative to traditional banking
Money Bank, which employs more than 700 people and has 25
branches, is active in personal loans, vehicle financing, credit
cards and insurance services, recording a net profit of 133
million francs in 2012.
GE Capital will keep a minority stake in the Swiss lender
for a period of one year and plans to reduce the stake over
Credit Suisse is sole global coordinator and joint
bookrunner for the offering, while Bank of America Merrill Lynch
and Deutsche Bank are joint book runners. Bank Vontobel is