(Adds comment from GE's Baker Hughes, updates shares)
HOUSTON, Feb 21 (Reuters) - Shares of General Electric Co's Baker Hughes rose on Wednesday after the parent company said it would not shed its holdings in the oilfield services business before the expiration of a two-year lockup period, reversing an earlier stance that had cast uncertainty around the stock.
General Electric last November said it was considering shedding its Baker Hughes holdings to refocus its business and boost cash flows. The announcement came just months after the conglomerate had purchased a 63 percent stake in the firm under a deal that combined its oil and gas services and equipment business with Baker Hughes to create the second largest oilfield services firm by revenue.
A recent move in oil prices to above $60 a barrel and the relative low valuation of Baker Hughes stock had some investors questioning whether General Electric would spin off the company before a two-year lockup period the companies set as part of the merger agreement.
"Given today's valuation levels, we see a lot of upside there. We like the macro trends. At this point in time, we have no intent to change anything or execute prior to the expiration of any of the lockup periods," said Jamie Miller, GE's finance chief, at a Barclay's conference in Miami.
Baker Hughes shares, which rose as much as 9 percent from the day's low, closed at $26.76 on the New York Stock Exchange, up about 1.2 percent.
Under the merger agreement, General Electric cannot spin off its investment without special approval from a committee of board members.
Despite complementary offerings and the recent spike in oil prices, shares of GE's Baker Hughes have fallen by more than 30 percent since the close of the merger. Disappointing fourth quarter results and lowered guidance prompted analysts to lower profit targets for the year.
"The uncertainty had been pressuring the shares," said James West, senior managing director and partner at investment bank Evercore ISI.
A spokeswoman for GE's Baker Hughes on Wednesday said Miller's comments had reinforced the parent company's commitment and support.
"We both see the value creation opportunity," she said in an emailed statement. (Reporting by Liz Hampton, editing by Marguerita Choy and Tom Brown)