Citigroup May Seek Merger As Stock Plunges Further

Executives at Citigroup Inc., faced with a plunging stock price, began weighing the possibility of auctioning off pieces of the financial giant or even selling the company outright, according to people familiar with the matter.

The internal discussions are at a preliminary stage and don't signal that Citigroup's board and management are backing down from their insistence that the New York company has ample capital, funding and strategic direction, these people said. But with the stock down another 26% Thursday, its worst one-day percentage decline ever, Citigroup officials have decided they need to reckon with a range of scenarios that were unthinkable only weeks ago.

http://online.wsj.com/article/SB122722907151946371.html?mod=mktw

Does NO ONE see what this means?

I'm going to hijack this thread and turn it into the "dead company pool."

The rules are as follows: pick as many companies as you would like and for each provide a "dead date." Dead is defined as either a merger, acquisition, bankruptcy, or government receivership. Closest in either direction wins.

I'll go first.

Ford: 1/20/09
GM: 12/31/08
Citi: 12/10/08
Lincoln National: 12/14/08 (has to be a Friday)
Russia: 1/31/09 (revolution, not bankruptcy)

The winner gets nothing more than a kudos and an extra slice of dignity.

U pirate!!! what's the ransom? 25 meeeeellion worthless US$?

I'll take the over on Russia. I know that one pretty well. It will be ugly, but no revolution. More like 1998 default, but with a bit more of a safety net, infrastructure, etc. built up over the fat oil years.

I will take the under on GM. I think either a bailout or filing happens before the end of the year.

In 1998 Russia had government default. Now it is corporations that seek Government assistance to pay foreign debt - it's a bit different story. Also there is almost NO new infrastructure that was built over fat oil years - money simply wasted.
There will be NO revolution.

barskaya, I think you overstate the point (although I agree whatever has been built up is insufficient). Regardless, no point hijacking the thread to debate Russia's follies.

Citi is a mess. They have been talking seriously about selling off pieces of their business for about 18 months. They have way too much fat in their ranks and are just too big and too poorly run to stay as they are. This sounds terrible right now, but regardless of the market, Citi was going to make drastic changes this year or early next year. This has been coming for them for a long time and they just cannot avoid it now. They will be much better off once they reorganize if they do it right....although why should they do it right, sinc ethey have bungled things for last 8 years.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aEzRwKlMg4xY&refer=home

"Citigroup Inc. Chief Executive Officer Vikram Pandit told employees he doesn't plan to break up the company, aiming to reassure workers as the stock resumed a skid that has erased more than half its value in three days."

"Citigroup spokeswoman Christina Pretto declined to comment on the board meeting. She reiterated a statement made by the New York-based company earlier this week that it has ``a very strong capital and liquidity position and a unique global franchise.''"

Why is it that whenever they say they are well capitalized, it's like the bell toll?

"a unique global franchise"

That's the whole problem. Nobody knows it does.

They have to contain the damage from the run on the stock price. This could be a chance to fix Citi once for all going forward, but I am not confident they will do it the right way.

type3 -- on your Pandit quote -- if they're moving their lips, they are lieing to you.

BN 10:24 *CITI IN TALKS WITH SOMALI PIRATES FOR POSSIBLE CAPITAL INFUSION

BN 10:25 *WILL REQUIRE ALL CITI EMPLOYEES TO WEAR PATCH OVER ONE EYE

*SOMALIAN PIRATES APPLY TO BECOME BANK TO ACCESS TARP

*PAULSON: TARP PIRATE EQUITY IS AN `INVESTMENT,' WILL PAY OFF

*KASHKARI SAYS `SOMALI PIRATES ARE 'FUNDAMENTALLY SOUND' '

*Moody's upgrade Somali Pirates to AAA

*HUD SAYS SOMALI DHOW FORECLOSURE PROGRAM HAD `VERY LOW'
PARTICPATION *

SOMALI PIRATES IN DISCUSSION TO ACQUIRE CITIBANK *

FED OFFICIALS: AGGRESSIVE EASING WOULD CUT SOMALI PIRATE RISK *

FED AGREED OCT. 29 TO TAKE `WHATEVER STEPS' NEEDED FOR SOMALI PIRATES
--------------------------------------------------------

Somali Pirates in Discussions to Acquire Citigroup

By Andreas Hippin
November 20 (Bloomberg) -- The Somali pirates, renegade Somalis known
for hijacking ships for ransom in the Gulf of Aden, are negotiating a
purchase of Citigroup.

The pirates would buy Citigroup with new debt and their existing cash
stockpiles, earned most recently from hijacking numerous ships,
including most recently a $200 million Saudi Arabian oil tanker. The
Somali pirates are offering up to $0.10 per share for Citigroup, pirate
spokesman Sugule Ali said earlier today. The negotiations have entered
the final stage, Ali said. ``You may not like our price, but we are not
in the business of paying for things. Be happy we are in the mood to
offer the shareholders anything," said Ali.

The pirates will finance part of the purchase by selling new Pirate
Ransom Backed Securities. The PRBS's are backed by the cash flows from
future ransom payments from hijackings in the Gulf of Aden. Moody's and
S&P have already issued their top investment grade ratings for the
PRBS's.

Head pirate, Ubu Kalid Shandu, said "we need a bank so that we have
a place to keep all of our ransom money. Thankfully, the dislocations
in the capital markets has allowed us to purchase Citigroup at an
attractive valuation and to take advantage of TARP capital to grow the
business even faster."
Shandu added, "We don't call ourselves pirates. We are coastguards and
this will just allow us to guard our coasts better."

modern - thank you. Funniest thing I've read in a long time. Love the patch over eye line.

First kspeak and the Chicago merger, now this. I think economic collapse is good for creativity.

Type3 - it's Friday of a tough week and humor makes you realize it's not worth going crazy over, right?

A collapsing economy definitely brings out the comedians!