Reuters: Regulatory News: UPDATE 1-Akbank falls on uncertainty over Citi stake sale

Reuters: Regulatory News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 1-Akbank falls on uncertainty over Citi stake sale Mar 26th 2012, 10:02 Mon Mar 26, 2012 6:02am EDT * Citi plans to reduce its stake to below 10 pct from 20 pct * Akbank says Citi must make offer to Sabanci Holding * Citi's move driven by technical reasons * Shares in Akbank, Sabanci decline By Asli Kandemir and Seda Sezer ISTANBUL, March 26 (Reuters) - Shares in Turkey's Akbank fell nearly five percent on Monday after Citigroup said it plans to reduce its stake to below 10 percent from 20 percent, with uncertainty over the sale method and purchaser weighing on the stock. Analysts said they saw Citigroup's move as a way to shore up its capital base after it topped a list of U.S. financial institutions that failed the Federal Reserve's latest round of stress testing. Citi said last week the current carrying value of its investment in Akbank is $3.4 billion. Akbank said Citi must make its offer to its parent Sabanci Holding under the terms of its shareholders' agreement. "The critical point is which method will be used for the selling process," said Garanti Securities analyst Recep Demir. He said selling the stake on the Istanbul Stock Exchange (ISE) would put pressure in the stock price while arranging a deal through corporate buyers should have no material negative impact . Analysts have doubts about a possible sale to a corporate buyer as the sale would not give management rights. "Citi has one member in Akbank's board and it is highly likely that Citi will lose its seat in the board following the sale," BGC Partners analyst Muge Dagistan said. "I do not see any bank showing an interest without any right for a member on the board," said Sadrettin Bagci, an analyst at Yatirim Finansman. Citi's stress test failure was a shock for the bank that was widely expected to return billions of dollars in extra capital to shareholders soon, analysts said. Akbank shares fell 4.68 percent to 6.92 lira by 0934 GMT, while parent Sabanci Holding shares dropped 2.11 percent to 7.42 lira. Akbank said Sabanci will make its assessment when the offer is made, adding Citigroup's reduction of its stake was for technical reasons. Analysts do not see a share buyback by Sabanci Holding very likely as the conglomerate has said in the past that it aims to reduce its exposure in the finance segment. The group's purchase also would require additional external funding with its large energy and cement investments already in the pipeline. Citi made a similar move last week in China by selling its stake in Chinese lender Shanghai Pudong Development Bank to institutional investors. The U.S. bank last month also sold its stake in India's biggest mortgage lender Housing Development Finance Corp for $1.9 billion. Citi purchased its 20 percent stake in Akbank in January 2007 for $3.1 billion, its stake currently is worth around $3.2 billion as of March 23 close. Istanbul's main stock index fell 0.23 percent to 61,252 points. Bank shares fell 1.22 percent. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions