General Electric open to borrowing to buy back its shares

GE suggests it could pursue proposal backed by Trian that revealed 1% stake in company

General Electric’s offices in  France: chief financial officer Jeff Bornstein said there was little difference between GE’s strategy and  proposals set out by Trian.  Photograph: Sebastien Bozon/AFP/Getty Images

General Electric’s offices in France: chief financial officer Jeff Bornstein said there was little difference between GE’s strategy and proposals set out by Trian. Photograph: Sebastien Bozon/AFP/Getty Images

 

General Electric is open to the idea of borrowing money to buy back more of its shares, its chief financial officer has said, suggesting it could pursue a proposal backed by Trian, the activist investment fund led by Nelson Peltz that last week revealed a 1 per cent stake in the company.

GE chief financial officer Jeff Bornstein said there was little difference between GE’s strategy and the proposals set out by Trian. For example, he said, it was possible GE could raise its borrowings to buy back more shares, as Trian recommended.

The company has already promised to buy back $35 billion in shares by 2018, using proceeds from the sale of most of GE Capital, the financial services division, but Mr Bornstein suggested it could go further.

“If our stock is undervalued, there is a good possibility we would invest that way,” he said.

– (Financial Times Service)