Credit debacle an opportunity for Mexico's Slim
By Noel Randewich
MEXICO CITY, Dec 2 (Reuters) - Mexican tycoon Carlos Slim has taken advantage of market turmoil caused by the global credit debacle to place heavy bets on hard-hit companies, an old strategy that has made him one of the world's richest men.
Slim, whose main asset is Latin American cell phone giant America Movil (AMXL.MX) (AMX.N), recently increased his stake in U.S. luxury retailer Saks (SKS.N) to 18 percent, making him the company's biggest investor.
Last week, Slim's Inbursa brokerage in Mexico bought at least $150 million worth of Citigroup (C.N)(C.MX) shares as they sank to lows not seen since 1992.
It was unclear whether Inbursa bought the Citi stake on behalf of Slim, 68, or for other clients.
"He's taking advantage of prices," said Rogelio Gallegos, a portfolio manager at Actinver in Mexico City. "It's the best moment in the last five years to take stock market positions."
Building positions in Saks and Citigroup, both hammered recently by the U.S. credit debacle, would be true to Slim's "Midas" touch history of acquiring struggling, cheap businesses and turning them into profitable cash-cows.
"He tends to be a value investor, a contrarian investor as well," said Merrill Lynch analyst Carlos Peyrelongue. "He was fairly underinvested during this down cycle."
The son of a Lebanese immigrant, Slim is one of the world's three wealthiest men, according to Forbes magazine.
His far-flung business empire includes fixed-line telecom giant Telmex (TELMEXL.MX) (TMX.N), department stores, restaurants and firms that make cigarettes, floor tiles and car parts.
Slim's father owned a Mexico City general store "Star of the Orient" and went into real estate when property was cheap during the 1910-1917 Mexican Revolution.
BUYING CHEAP
In the mid-1970s, Slim began his trademark trait of buying struggling companies to turn them around. He acquired a cigarette package maker and a tobacco company that began making Marlboro cigarettes.
By 1990 he had a mountain of cash, and together with partners made a $1.7 billion bid for former state telephone monopoly Telmex and won the privatization auction.
It turned out to be his defining acquisition as he turned sluggish bureaucracy into a cash-generating jewel.
As fallout from the financial crisis hit Mexico this year, Slim's family snapped up punished shares of America Movil and Telmex, according to regulatory filings.
In the past couple of years, Slim has said he was stepping back from his companies to concentrate on charities, but his recent market moves suggest he still has a close interest in the market.
Investors have been watching for signs that Slim thinks equities are bottoming out.
"News that he's buying Citibank (shares), that he's already investing, is meaningful to the market as a signal," said Gonzalo Fernandez, head of equities strategy at Santander in Mexico City.
Saks, known for its flagship Saks Fifth Avenue store in New York City, took steps to avoid a takeover after learning Slim increased his investment.
Slim has also bought a 6.4 percent stake in The New York Times Co (NYT.N), the newspaper publisher said in September, an investment the mogul has called "financial" rather than strategic. (Editing by Dave Zimmerman)
