2nd UPDATE:Ackman:Wachovia Should Sell Businesses Separately
Monday October 6th, 2008 / 18h46
(Adds details throughout, including more on Ackman's AIG stake, comment on Citi lawsuit, and details about his fund performance and Wachovia stake performance.) By Joseph Checkler Of DOW JONES NEWSWIRES Activist investor Bill Ackman said Monday that Wachovia Corp. (WB) would be best off selling off its banking and brokerage businesses separately, and that he expects the bidding war for the bank to be resolved in weeks rather than months. Speaking at the fourth annual Value Investing Congress at Lincoln Center in New York, Ackman said his hedge fund has piled into Wachovia shares because he sees it as "one of the more fascinating investment opportunities" he's seen in recent times. Ackman, whose Pershing Square Capital Management now owns more than 7% of Wachovia's stock, said he started "aggressively" buying shares of the bank at $1.84 on the afternoon of Sept. 29, after Wachovia said it was being acquired by Citigroup Inc. (C). He then sold 9.5 million shares after Wells Fargo Corp. (WFC) came in with a rival bid last Friday, and then bought again when Citi challenged the Wells Fargo transaction. The company is best sold off in two pieces because of the tax benefits of such a transaction, said Ackman, who acknowledged Wachovia is only his second investment in a financial-services company in the past five years. The other one is a "small" position in American International Group Inc. (AIG), which he took last month. He said Pershing Square is a "top 10 or 12" shareholder in AIG, and that he started buying the insurer's shares when they were trading at about the levels they're trading at now. AIG shares recently traded at $3.78, down 8 cents. Ackman said Citi made several mistakes in its initial agreement to buy Wachovia, including waiting too long to sign a merger agreement. "It doesn't take six days to sign a merger agreement," Ackman said. Citi, he said, "acted as though the deal was done." He said the fact that Wachovia incorrectly spelled "subsidiary" as "subsidary" in its Sept. 29 Citi press release spoke to the haste of the agreement. He also called it unusual that both Wachovia and Citi got their boards to approve the deal so quickly. Asked about Citi's $60 billion lawsuit against Wachovia, Wells Fargo and their directors, Ackman said that while he understood why the bank was upset, "My guess is Citi really has nothing." Ackman is bullish because he thinks Wachovia is worth between $15 billion and $18 billion, or eight times its trailing earnings before taxes, depreciation and amortization, or Ebitda. Ackman said the Wells Fargo deal would be "great" for Wells Fargo, citing the $5 billion of annual synergy costs the combined company would save. He also said the bailout offer by Citi and the federal government "has exculpatory language which protects Wells Fargo." Ackman presented his thoughts in a presentation titled "Wachovia Corp.: More Than Meets the Eye." Last November's Value Investing Congress also featured Ackman, but then he was talking about shorting bond insurers, an investment that has worked quite well for him. His fund has done well enough this year that only about 2% of investor money has been redeemed, even though he expects major redemptions at other hedge funds to continue. He acknowledged that his fund has already profited from the Wachovia stake. Shares of Wachovia recently were off 8% at $5.72. - By Joseph Checkler, Dow Jones Newswires; 201-938-4297 Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=p6N7fvxBgNVlFcXE2xeYCg%3D%3D. You can use this link on the day this article is published and the following day.
American International Group est le 1er groupe d'assurance mondial. Les revenus par activité se répartissent comme suit : - assurance (95,7%) : vente...
