Ask Matt: Should I accept GE's offer?

General Electric (GE) is offering investors a deal: shares of a company it controls at a 7% discount. But investors might be better off skipping it.

GE investors are being notified of an offer to exchange their shares in the diversified manufacturing company for shares of Synchrony. Synchrony is already publicly traded under the symbol SYF, but GE owns an 84% stake in the largest provider of third-party credit cards in the country. GE is looking to further divest its holdings in financial assets and is allowing its investors to own more Synchrony. GE investors have a bit of an incentive since the deal, expected to end the week of Nov. 16, lets investors trade shares for Synchrony at 7% below the price.

Deciding whether the trade is worth it is a topic that will keep arbitrage traders busy. It is possible some speculators could accept the exchange, sell Synchrony shares and then buy back GE shares. But long-term GE investors, who hold their GE shares, might actually benefit by doing nothing, says Nicholas Heymann, analyst at William Blair. The exchange offer could reduce the float of GE stock by 6% to 7%. Holding GE stock generates more than a 3% dividend yield, and the company's core business is looking strong, Heymann says. "This is a different company," he says. "It's not just a safe stock, but could return growth from 2017."

Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.