Alwaleed says Citi shares too low, not selling: report
RIYADH (Reuters) - Citigroup Inc's (C.N) largest individual shareholder, billionaire Saudi Prince Alwaleed bin Talal, regards the bank's share price as ridiculously low and is not selling any shares, a magazine quoted him as saying.
"I will sell nothing. We are selling nothing," Alwaleed was quoted in Fortune magazine as saying of the largest U.S. bank, whose shares have slumped after failing to assure investors that a potential $11 billion write-down for subprime mortgages would not grow.
"I want to make it clear that I fully support the leadership of Citigroup and think it is a very strong company with a good future," he said, according to excerpts of the interview dated November 9 and emailed to Reuters on Saturday.
Alwaleed controls 95 percent of Kingdom Holding 4280.SE, which in its turn owns 3.6 percent of Citigroup, according to Kingdom Holding documents published in July.
Kingdom spokeswoman Heba Fatani could not immediately be reached for comment on the interview.
Shares of Citigroup have tumbled 21 percent so far this month. They last closed at $33.10 on Friday.
"Citibank at this price is ridiculous. Citibank does not deserve that. Citibank deserves a lot better," Prince Alwaleed was quoted as saying. He originally paid $2.75 per Citigroup share, adjusted for stock splits, he said.
Citigroup reduced its previously reported third-quarter profit this month because of worsening credit markets, which it expects will reduce future cash flow. The bank said it had direct exposure to $55 billion in subprime mortgages, which would lower revenues by $8 billion to $11 billion.
"This company can withstand a lot of pressure and a lot of stress because its equity is so big," Alwaleed said.
MANAGEMENT CHANGES
Robert Rubin agreed last weekend to step into the role of chairman at Citigroup after Charles Prince quit under pressure.
"I trust Mr. Rubin," Prince Alwaleed said.
"I am extremely disappointed with Chuck Prince ... (he) let down the shareholders completely ... The risk-management situation was very wrong at Citibank," he said. Alwaleed had long publicly supported Prince.
Sanford Weill, who built Citigroup and hand-picked Prince to succeed him, is not interested in becoming Citigroup's chief executive or chairman, Alwaleed added.
"Last week, Sandy was in Riyadh ... Sandy told me, 'I have no aspirations whatsoever to be CEO or chairman'," he said.
The Saudi prince added he did not have anyone in mind to replace Prince. "My recommendation and advice for them is they don't hire anyone unless this guy has expertise in banking. I told them, next time no lawyer, please," he said.
He advised the bank should have a succession plan. "You can't have a company that size without a (successor) ready".
Alwaleed, a nephew of King Abdullah, has made billions of dollars investing in underperforming companies.
He began investing after graduating from California's Menlo College in 1979, and a year later he received a $300,000 loan from Saudi American Bank, which was run by Citicorp, according to his biography.
In 1991, Alwaleed invested $590 million in Citicorp as it struggled with Latin American loan losses and U.S. real estate market collapse. That stake is now worth about $6 billion.
(Reporting by Souhail Karam; Editing by Peter Blackburn)
