Report: Citigroup weighs potential sale
San Francisco Business Times - by Mark Calvey
Citigroup executives, faced with a plunging share price, began weighing the possibility of auctioning off pieces of the financial giant or even selling the company outright, the Wall Street Journal reported late Thursday, citing people familiar with the situation.
The bank’s shares closed at $4.71 per share, down 26 percent, or $1.69, in New York trading Thursday. Citi’s stock fell sharply despite today’s announcement by a major investor, Saudi Arabian prince Alwaleed bin Talal bin Abdulaziz Al Saud, that he intends to raise his holdings from less than 4 percent to 5 percent of the company’s stock.
“Prince Alwaleed began buying Citi shares as he strongly believes that they are dramatically undervalued,” said the Journal, citing an emailed statement from Alwaleed’s office.
Citi’s top execs were in meetings Thursday trying to hash out a way to stabilize the bank, the newspaper reported.
Citigroup executives also are weighing the possibility of selling the company or merging with a rival, perhaps Morgan Stanley (NYSE: MS) or Goldman Sachs Group Inc., (NYSE: GS) the Wall Street Journal said.
The potential sale of the company comes as little surprise to some industry observers. The bank faces a litany of woes, not the least of which is losing about $20 billion over the past four quarters.
The New York bank was increasingly seen as a paper tiger on the prowl as it struggled with Wells Fargo (NYSE: WFC) to acquire Wachovia with government help. (NYSE: WB) Citi desperately needed the Charlotte bank’s low cost deposits and extensive branch network to help stabilize its own operations.
Citi’s board of directors is to meet Friday, the paper said, citing people familiar with the situation.
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