Source: Feds Likely To Approve Arab Bailout Of Citibank
By Pat Dollard:
Citicorp announced tonight during Asian trading hours that it had arranged a $ 7.5 billion critical capital infusion from Abu Dhabi. Citi has been under tremendous market pressure due to large potential losses from a variety of mistakes in the sub prime and asset backed special investment vehicle business. And it stock had been under pressure for weeks. Making the announcement, when American Markets were closed, has caused a flurry of short covering in SNP500 Futures at this hour.
This deal will make the Arabs a “significant shareholder” in one of the U.S.’s largest and most powerful financial institutions. U.S. officials have expressed concern that Muslim acquisitions could target sensitive industries with links to national security.
I’ve just spoken to a very thoughtful and reliable mover and shaker in the financial world who requested anonymity, and he has warned me that this story may blow up as “the next Dubai port deal.” He said that it is likely to “send chills through the Israelis”, and that the press may well make a big deal out of it, arguably “overblowing it”, so that it creates similar levels of anger and paranoia as the Dubai deal did.
As the AP put it: “The investment is the latest by sovereign funds in the Middle East that have been building up their overseas investments recently, many of them on the back of oil prices that have risen more than 60 percent this year and have brought the region record cash flows.
Dubai International Capital, which is owned by the ruler of that booming Persian Gulf city-state, announced earlier Monday that it has acquired a stake of undisclosed size in the Japanese electronics and media company Sony Corp. Its other investments this year included acquiring a 3.12 percent of European Aeronautic Defence & Space Co., which builds Airbus commercial planes and military aircraft. The firm also holds stakes in Daimler AG and British bank HSBC Holdings PLC.”
There is strong market speculation that Citibank is about to layoff 45,000 employees. This transaction is unlikely to affect any of those potential layoffs, but it will shore up critical available capital.
The Stake: The Abu Dhabi Investment Authority will become one of the bank’s biggest shareholders, with an interest of no more than 4.9%.
A Saudi already owns a similar stake in the company - this will make two: “Abu Dhabi’s move recalls the early 1990s investment in Citi made by Saudi Prince Alwaleed bin Talal. After Citi made some losing bets on U.S. real estate and Latin America, Alwaleed bought a stake in the bank for less than $600 million that has since ballooned into several billions of dollars.”
The Feds still have to approval the deal, but my source said “I’m sure they will.”
Reuters Story:
NEW YORK, Nov 26 (Reuters) - Citigroup Inc (C.N: Quote, Profile, Research) said on Monday it has reached a deal to sell $7.5 billion worth of Equity Units, to be converted into common shares, to the Abu Dhabi Investment Authority (ADIA).
Citi said ADIA’s total ownership in its common shares would total no more than 4.9 percent of Citi’s total shares outstanding.
Under terms of the agreement, ADIA will have no special rights of ownership or control and no role in the management or governance of Citi, including no right to designate a member of the board of directors.
Each Equity Unit is mandatorily convertible into Citi shares at prices ranging from $31.83 to $37.24 per share.
The investment is expected to close within the next several days, Citi said. (Reporting by Bill Berkrot, editing by Carol Bishopric)
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…I don’t like the sound of this very much at all.
November 26th, 2007 at 9:48 pmSo now two Arabs have a big say in what goes in U.S. financial policy. Interesting.
Huckabee’s right.
November 26th, 2007 at 10:35 pmSo what happens when government is bought by special interests
November 26th, 2007 at 10:39 pm(companies) and those interests end up being bought by the highest bidder, who happen to be Islamic?
If those new owners don’t really care about money because they
have you sending them all your hard earned cash at the pump, then they could dump the dollar at the appropriate time and wage a $ war/jihad on us.
Did I just invent a conspiracy theory?
I have no sympathy for these banks or those that took the loans. Those that got $500,000 houses will have to move to $250,000 houses, those that got $250,000 houses will have to move to $100,000 houses and so on down the line. They, lender and borrower took a chance and lost. The democrats will play it up with minority, single women with children as the poster child. Aww, see, evil Bush, Cheyney and Halliburton are putting those that always dreamed of “owning” their home out on the street. Don’t give a fuck.
November 27th, 2007 at 2:38 amhey, it’s a good new, arabs won’t let the dollar go down
is it right that Airbus will settle in Seatle ?
November 27th, 2007 at 3:52 amLet’s call it what it is: “Feds To Approve Muslim Bailout Of Citibank”
November 27th, 2007 at 4:03 amSony is also selling a huge share of ownership to Dubai.
http://online.wsj.com/article/SB119606164404403753.html
November 27th, 2007 at 4:24 amWTF!!—thought the EEEVVVVIILL Jews controlled the financial dealings in this country along w/ eeeevvvviill infidels, Booooosh and Cheeeeeny
November 27th, 2007 at 4:51 amHey Citibank management punks, don’t forget your yr end bonus checks, for doing such a fine job. Americka thanks you.
F**kin loosers!
Shame on us.
Greed is bringing our demise.
You cannot have foreigners own you. This is all absurd.
You see how money power, fame are an illusion and bring trouble upon your house?
Shame on Sony for going this route too.
November 27th, 2007 at 6:31 amWell one could always suppose that there may be a reason behind allowing this foreign investment…Can you say NATIONALIZATION..poof there goes there money…See Chavez and Venezuela
November 27th, 2007 at 6:40 amWhy is everyone angry at the Arabs when it’s the U.S. companies that approve this stuff? Lol.
November 27th, 2007 at 10:11 amCiti (one of the world’s largest banks) is 49% owned by Saudi princes. It should come as no surprise that another US ally (UAE) is investing in the bank. Remember, these same countries we sell Apaches and F-16s to as well as security guarantees. We are not talking about Iran or Venezuela here.
November 27th, 2007 at 11:06 amIsn’t Dubai the state that hosts and gets a free pass from Al Jazeera?
November 27th, 2007 at 1:25 pm