It's A Deal

March 4, 2008

Nothing Foreign About This Idea

It seems the sovereign wealth funds are going to fit right in, thank you very much.

There’s been an intriguing development out of Dubai Tuesday, where the head of a SWF told a crowd of private equity folks that investments in Citi by a handful of foreigners won’t cut it. “It’s going to take more than that to rescue Citi … a lot more money,” said the CEO of Dubai International Capital, Sameer Al Ansari.

Three things strike me as interesting. One, it didn’t take long for these saviors to start trashing their peers. Two, are we really at the point yet where Citi needs rescuing? The extra cash helps, but let’s not get ahead of ourselves. And three, maybe this gentleman is a real pro at talking his book. 

Citi shares are pulling back Tuesday, down nearly 7%. Now, that’s more likely the result of Merrill’s dramatic estimate revision on the bank and the broader selloff in the stock market. There are also unconfirmed reports that Citi will lay off the equivalent of a small town in the next year or so.

None of that is helping the stock, but by suggesting that Citi needs saving, that it’ll be the SWFs to do it, and that the bank needs much more to be saved, maybe Al Ansari was looking for a better entry point into the stock. Just a thought.

It surely wouldn’t be the first time a would-be investor appeared less-than-interested, right before pouncing. Not a foreign idea at all.