Citigroup executives are worried that managers of activist hedge funds will try to force a break-up of the company, David Wighton of the Financial Times reports this morning.
Senior Citigroup executives fear the world’s biggest financial services company could become the target of activist hedge funds that would press for it to be broken up.
The executives believe Citigroup needs to step up its investor relations and explain better to shareholders the value of keeping its businesses together.
Many have dismissed the possibility that Citigroup, valued at $260bn, could become an activist target. But one Citigroup executive said: “Even Citigroup is not too big. It’s not impossible.”
None of executive are named in the story, and at least one person inside Citigroup (who also asked to remain anonymous) tells us that he suspects the story is a plant from executives trying to get management's attention following the campaign by The Children's Investment Fund which appears to have convinced ABN AMRO, the dutch bank at the center of a bidding contest between Barclays, the Royal Bank of Scotland and Bank of America. The fact that the executives feel the need to make their argument for better investor relations through the press, and to raise the threat of activist hedge funds, is a sign of the disfunctional culture at Citi, our source says.
Citigroup chiefs fear push for break-up [Financial Times]