By Saabira Chaudhuri
GE Capital Corp. and asset manager CIFC Corp. (DFR) have inked
an agreement to explore business opportunities and facilitate
third-party investment advisory referrals.
Under the terms of the agreement unveiled Tuesday, GE Capital
will receive one million shares of CIFC common stock--valued at
Monday's close at $7.25 million--warrants to purchase two million
shares of a newly created class of non-voting CIFC preferred stock,
and about $4.9 million in cash from CIFC.
The two companies will form a commercial council made of senior
members of both companies. Peter Gleysteen, chief executive of
CIFC, and Neeraj Mehta, a GE officer, are slated to serve as
co-chairs of the council. GE Capital has the right to appoint an
executive to CIFC's board.
GE Capital Debt Advisors LLC, a unit of GE Capital, will exit
its third-party investment advisory business, and has agreed to
assign its role as manager of four collateralized loan obligation
funds representing about $700 million in assets under management to
CIFC Asset Management LLC, a unit of CIFC.
The transaction is expected to close in September.
Shares of CIFC closed at $7.25 Monday and were inactive
premarket. The stock is up 34% so far this year.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com
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