Citigroup Gives Activist ValueAct More Access to Its Business
January 11 2019 - 9:59AM
Dow Jones News
By Kimberly Chin
Citigroup Inc. has agreed to give activist investor ValueAct
Capital Partners LP greater insight into its strategy, governance
and operations without giving it a board seat.
The New York bank said Friday it has entered into an
information-sharing and engagement agreement with ValueAct Capital,
which will give the hedge fund access to confidential information
and the ability to work directly with members of Citi's management
team and board.
According to the companies, ValueAct owns approximately 32
million of the issued and outstanding shares of Citigroup common
stock. According to FactSet, Citi has 2.4 billion shares
outstanding, giving ValueAct roughly a 1.31% stake. Based on
Thursday's close, the stake is valued at $1.8 billion.
In the agreement, ValueAct is required to support the management
and the board throughout the term of the agreement, which ends in
December 2019.
The bank said that ValueAct won't be pursuing a board seat at
this time. ValueAct has a board member at Alliance Data Systems
Corp., a Citi competitor.
Should situations change, Citi would also be open to considering
a likely proposal by ValueAct to put forth a candidate for a board
seat, the company said in a statement. A proposed candidate would
still go through the usual process for director candidates.
ValueAct began amassing its stake in the bank in late 2017.
According to a letter to its investors reviewed by The Wall Street
Journal last year, ValueAct noted that Citi's advantage is its
"old-fashioned treasury management for global businesses" that is
in an important part of the plumbing in the global financial
machinery, positioning it well in businesses such as
foreign-exchange and debt underwriting for multinational
clients.
Write to Kimberly Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
January 11, 2019 09:44 ET (14:44 GMT)
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