Friday, January 11, 2008


Citigroup Gains on WSJ Report of Foreign Investment
Jan. 10 (Bloomberg) -- Citigroup Inc. rose in New York trading after the Wall Street Journal reported that the biggest U.S. bank is seeking as much as $10 billion from foreign investors as mortgage-related losses deepen.

Merrill Lynch & Co., the largest brokerage, also is in talks with investors and may get $3 billion to $4 billion, the Journal said earlier today, without citing any sources. Citigroup has already received about $7.5 billion from Abu Dhabi and Merrill said last month that it's raising as much as $6.2 billion from Singapore's Temasek Holdings Pte. and New York-based money manager Davis Selected Advisors LP.

Citigroup may post $18.7 billion of fourth-quarter writedowns for mortgages and bad loans and cut its dividend by 40 percent, while Merrill may report $11.5 billion of writedowns, according to Goldman Sachs Group Inc. analyst William Tanona. Citigroup and Merrill lost almost 50 percent of their market value in the past 12 months and the companies replaced their chief executive officers.

Bank of America in advanced talks to buy Countrywide Financial
NEW YORK (Thomson Financial) - Shares of Countrywide Financial shares rallied Thursday, adding as much a 74% in intraday trading moments after a report said Bank of America is in advanced talks to buy the embattled mortgage lender.

The Wall Street Journal reported that it isn't clear how quickly a deal might be struck, citing two people familiar with the matter, who said it 'could occur very soon.' The report also said an agreement could be delayed or fall apart altogether.

In August, Bank of America bought $2 billion of preferred shares convertible into a stake of about 16% in the lender. Bank of America, Charlotte, N.C., has first right of refusal in any sale of Countrywide, and Bank of America has a long history of opportunistic takeovers of banks facing distress, according to the report.

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