© Reuters. The Citigroup Inc logo is seen at the SIBOS banking and financial conference in Toronto

By Svea Herbst-Bayliss and David Henry

NEW YORK (Reuters) – Citigroup Inc (N:) will give ValueAct Capital more access to its books and board of directors, signaling that the bank and the activist investing firm are deepening their relationship roughly a year after ValueAct first invested in Citi.

The two said on Friday that they had entered into an “information sharing and engagement agreement,” which will allow for a “deeper level of engagement and cooperation.”

The San Francisco-based hedge fund, one of the industry’s most closely watched so-called activist investors, unveiled a $1.2 billion stake in New York-based Citi last May, and said it liked the bank’s low risk and reliable revenue.

Value Act currently owns about 1.3 percent of Citigroup’s outstanding common stock and is one of its larger shareholders.

ValueAct, which differentiates itself from many more voluble activists, did not ask for a board seat at the time of its investment and said on Friday that it is not looking for one now. Many activist investors immediately demand a number of board seats and threaten proxy contests to get them. ValueAct has long preferred to work more collaboratively and behind the scenes, something that has earned respect from its investors and potential targets.

But when the time is right and some potential conflicts are eliminated, the hedge fund is expected to propose a candidate for the board, the statement said. ValueAct currently holds a board seat at Alliance Data Systems Corp (N:), which competes with Citigroup in issuing credit cards for retailers.

ValueAct and Citigroup on Friday declined to comment beyond the release.

Citigroup has made a number of changes since ValueAct first commented on its stake in May in a letter to its investors. Citigroup parted ways with the head of its struggling branded credit cards division, announced a reorganization of part of its investment bank, and named a new chairman and a new chief financial officer to replace men retiring from those posts.

Citigroup shares have continued to lag those of other big banks because of doubts about its ability to increase revenue following extensive restructuring after the financial crisis.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.




Citigroup allows hedge fund ValueAct more access By Reuters

LEAVE A REPLY

Please enter your comment!
Please enter your name here