Baker Hughes (BHI): Creating A Powerhouse - Evercore ISI
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Evercore ISI analyst, James West, reiterated his Hold rating on shares of Baker Hughes (NYSE: BHI) after the company announced it will combine with GE O&G to form a new, publicly-traded entity with GE owning 62.5% of the company and BHI shareholders receiving a $17.50 special dividend per share and 37.5% of the new company.
GE will contribute $7.4 billion to fund the cash dividend to BHI shareholders. Jeff Immelt will serve as Chairman and Lorenzo Simonelli, current President and CEO of GE O&G, will serve as President and CEO of the new company. Martin Craighead will serve as Vice Chairman of the Board. Five of the nine board members will be appointed by GE with the remaining four appointed by public shareholders. The “New” Baker Hughes will have dual headquarters in Houston and London. The transaction is expected to close in mid-2017, pending BHI shareholder approval and regulatory approval.
No change to the price target of $60.
Shares of Baker Hughes closed at $55.40 yesterday.
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