Pandit ‘Wouldn’t Be ‘Surprised’ If Treasury Weighs Stake Sale
Vikram Pandit, chief executive officer of Citigroup
March 11 (Bloomberg) -- Richard Bove, an analyst at Rochdale Securities LLC, talks with Bloomberg's Margaret Brennan and Pimm Fox about Citigroup Inc.'s stock price. Citigroup Chief Executive Officer Vikram Pandit will today raise the prospect of the U.S. bank earning as much as $20 billion from its main unit within a few years, the Financial Times said, citing unidentified people close to the situation. Pandit is scheduled to address investors at 12:45 p.m. at the Citi 2010 Financial Services Conference in New York.
March 12 (Bloomberg) -- Citigroup Inc. Chief Executive Officer Vikram Pandit said the U.S. Treasury Department will be free to sell its 27 percent stake in the bank starting next week and that he “wouldn’t be surprised” if the government were considering a sale.
“They’re free to do what they want to do,” Pandit said yesterday at an investor conference in New York. “I wouldn’t be surprised if they would actively think about something,” given where the stock is trading, he said.
The Treasury got its 7.7 billion shares in the New York- based bank last September, when the department converted $25 billion of bailout money into common shares at a cost of $3.25 each. The stock rose to $4.18 in New York Stock Exchange composite trading yesterday, giving the government a 29 percent paper gain on the stake, or about $7.2 billion.
A 90-day moratorium on a sale of the Treasury’s shares expires March 16, Pandit said. The Treasury, which has said it plans to sell the shares this year, is conducting a round of interviews with securities firms, including Citigroup, to decide which should manage the sale, a person with direct knowledge of the discussions said.
A range of strategies are under consideration, including a managed offering of the shares or selling them over time into the market, the person said, speaking anonymously because the talks are private. An average of 1.2 billion shares have changed hands each day over the past three days, compared with a daily average so far this year of 465 million shares, data compiled by Bloomberg show.
The Treasury would have to publicly register its shares before beginning to sell them on the open market, Citigroup Chief Financial Officer John Gerspach said at the conference.
In December, when Citigroup sold new shares to help repay $20 billion of bailout money, the Treasury said it would hold off selling any shares for at least 90 days.
The Treasury missed a chance to unload the shares for a $13 billion profit last October, when the stock price climbed as high as $5 and valued the stake at $38 billion.
To contact the reporter on this story: Bradley Keoun in New York at bkeoun@bloomberg.net.
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