The latest on Citi’s Mexican saga is this:
March 3 (Bloomberg) — Mexican opposition lawmakers plan to propose a bill that may force Citigroup Inc. to give up control of Grupo Financiero Banamex SA after the U.S. government said it will take a 36 percent stake in the New York-based company.
Under the draft published today in the official Senate gazette, if a foreign government has a stake in a foreign company that owns a Mexican bank, the foreign firm would have to reduce its ownership in the Mexican bank to less than 50 percent within 30 days. Senators from the opposition Institutional Revolutionary Party, or PRI, plan to propose the bill.
The proposal would modify Mexico’s banking law, which already prohibits foreign governments from owning or having a stake in banks that operate in Mexico, such as Banamex, which Citigroup bought for $12.5 billion in 2001. The U.S. government, which has channeled $45 billion into Citigroup, agreed to a third rescue on Feb. 27 that will give it a 36 percent stake.
Meanwhile, the insightful Inca Kola points us to the swirl of rumours circulating among Latin American quarters concerning potential buyers — and prices — for the Mexican subsidiary.
Brazil’s Jornal do Comercio has today placed Itau executives in Mexico City and goes as far as to say Itau will announce the purchase of Banamex from Citigroup next week. The price being hammered out revolves around U$12Bn, apparently.
$12bn for the Banamex wouldn’t be small change for the US bank, which now has a market cap of $6.6bn. However, we would be curious as to what Citi is currently valuing Banamex at on its own balance sheet. The closest we’ve seen is a sketchy figure that Banamex had about $39bn worth of assets at the end of Q2 2008. In any case, Citi is pretty adamant that it has no plans to sell the Southern subsidiary.
Related links:
Banamex, Itau and Citigroup: Rumours in the village - Inca Kola
Citi Mexicana - FT Alphaville
