Citi Going Down Too?

Wow...what a year.  Not to put PBT into the same category, but when they went down I was shocked, based on the amount of money they had raised.  Then Lehmann, Bear Stearns, etc.  Now it looks like Citi, with whom Pay By Touch partnered with in Singapore isn't going to make it.  They pre-date Lehmann, which came about during the Civil War era.  Unbelievable.  This from today's Wall Street Journal...

With roots stretching back to 1812 and more than 200 million customer accounts in 106 countries, Citigroup is an icon of global capitalism.

It is getting battered by the same financial storm that has already remade the face of Wall Street, forcing the sale of Bear Stearns Cos. and Merrill Lynch & Co. earlier this year, and triggering the bankruptcy filing of Lehman Brothers Holdings Inc.

Mr. Pandit and other Citigroup executives have told colleagues they are frustrated and befuddled by this week's 50% stock decline. Investors have dumped bank stocks en masse on fears that economic woes will batter financial companies worse than previously expected.

Weighing down the shares has been the Treasury Department's decision last week not to buy troubled assets from banks. Citigroup's balance sheet includes battered securities and loans that many investors hoped could be offloaded to the government.  Click to read the full report at The Wall Street Journal

Here's more on the story from various news wires:

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.

Citigroup's board of directors is scheduled to have a formal meeting Friday to discuss the options, according to people familiar with the situation. Directors also have been talking by phone about what could be done to reverse the stock's slide.

Top executives were locked in meetings Thursday to hash out a stabilization strategy. Chief Executive Vikram Pandit scheduled a conference call for 8 a.m. Friday to discuss the situation with senior managers.

A Citigroup spokeswoman said in a statement Thursday evening: "Citi has a very strong capital and liquidity position" and is "focused on executing our strategy," which includes cutting expenses and selling assets. "We believe the benefits will be seen over time."

Bank of America Uses Lehmann to Get Merrill Lynch

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Bank of America Buys Merrill Lynch Creating Unique Financial Services Firm

Combines leading global wealth management, capital markets and advisory company with largest consumer and corporate bank in U.S.

Related: Paulson Statement on SEC and Federal Reserve Actions Surrounding Lehman Brothers

CHARLOTTE, N.C., Sept. 15 /PRNewswire-FirstCall/ -- Bank of America Corporation today announced it has agreed to acquire Merrill Lynch & Co.,Inc. in a $50 billion all-stock transaction that creates a companyunrivalled in its breadth of financial services and global reach.

"Acquiring one of the premier wealth management, capital markets, and advisory companies is a great opportunity for our shareholders," Bank of America Chairman and Chief Executive Officer Ken Lewis said. "Together, our companies are more valuable because of the synergies in our businesses."

"Merrill Lynch is a great global franchise and I look forward to working with Ken Lewis and our senior management teams to create what will be the leading financial institution in the world with the combination of these two firms," said John Thain, chairman and CEO of Merrill Lynch.

Under terms of the transaction, Bank of America would exchange .8595 shares of Bank of America common stock for each Merrill Lynch common share. The price is 1.8 times stated tangible book value.

Bank of America expects to achieve $7 billion in pre-tax expense savings, fully realized by 2012. The acquisition is expected to be accretive to earnings by 2010.

The transaction is expected to close in the first quarter of 2009. It has been approved by directors of both companies and is subject to shareholder votes at both companies and standard regulatory approvals.

Under the agreement, three directors of Merrill Lynch will join the Bank of America Board of Directors. The combined company would have leadership positions in retail brokerage and wealth management. By adding Merrill Lynch's more than 16,000

financial advisers, Bank of America would have the largest brokerage in the world with more than 20,000 advisers and $2.5 trillion in client assets.

The combination brings global scale in investment management, including an approximately 50 percent ownership in BlackRock, which has $1.4 trillion in assets under management. Bank of America has $589 billion in assets under management.

Adding Merrill Lynch both enhances current strengths at Bank of America and creates new ones, particularly outside of the United States. Merrill Lynch adds strengths in global debt underwriting, global equities and global merger and acquisition advice.

After the acquisition, Bank of America would be the number one underwriter of global high yield debt, the third largest underwriter of global equity and the ninth largest adviser on global mergers and acquisitions based on pro forma first half of 2008 results.

Bank of America was advised by J.C. Flowers & Co. LLC, Fox-Pitt Kelton Cochran Caronia Waller and Bank of America Securities. It was represented by Wachtell, Lipton, Rosen & Katz. Merrill Lynch was represented by Shearman & Sterling.

Source: Press Release

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