Electrolux Rises as GE Confirms Plans to Shed Unit (Update1)
By Diana ben-Aaron
May 16 (Bloomberg) -- Electrolux AB, Europe's largest appliance maker, rose today in Stockholm trading as General Electric Co. confirmed that it is seeking a buyer, partner or spinoff for its consumer appliance unit.
The maker of fridges and vacuums rose as much as 5.5 kronor, or 5.9 percent, to 99.5 kronor, and closed at 96.5 kronor in the Swedish capital, where the company is based. That puts its market value at 30 billion kronor ($5 billion).
Electrolux has lost 44 percent of its value in the past year as soaring costs for raw materials and new product rollouts ate into earnings. The company revamped its European product line last year and introduced new appliances for the North American market last month.
``The figures that are being quoted for the GE unit give price-to-sales multiples that are more than twice what Electrolux is trading at,'' said [url=http://search.bloomberg.com/search?q=Michael+Andersson&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date :S:d1]Michael Andersson[/url], a Stockholm-based analyst at Evli Bank with a ``buy'' rating on Electrolux. ``Someone's put a price on white goods again. Of course it also sparks rumors about who could buy who.''
The GE unit accounts for more than half the $13.3 billion in sales of the company's Consumer & Industrial segment. Analysts estimated the sale would fetch $3 billion to $8 billion. Electrolux had sales of 104.7 billion kronor ($17.4 billion) last year.
The question of whether Electrolux would buy all or part of the GE unit ``is very open,'' Andersson said.
Electrolux ``doesn't comment on such matters,'' spokesman [url=http://search.bloomberg.com/search?q=Anders+Edholm&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date :S:d1]Anders Edholm[/url] said in an interview.
To contact the reporter on this story: [url=http://search.bloomberg.com/search?q=Diana+ben-Aaron&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date :S:d1]Diana ben-Aaron[/url] in Helsinki at dbenaaron1@bloomberg.net |