The Best and Worst Bank Deals of 2007

Time’s Bill Saporito says that the takeover of ABN Amro by the RBS-led consortium

was the

4th best business deal of 2007. Wha? RBS overpaid massively: the

consortium decided to pay mainly in cash, but by the time the deal closed, the

credit crunch had devastated the value of financial stocks, including those

in the consortium. Saporito tries to defend the $101 billion price tag by saying

that "for that kind of coin, RBS gets more swagger in the U.S." –

has he forgotten that LaSalle, the US asset RBS desperately wanted, ended up

going in the end to Bank of America?

To compound things, Saporito anoints the ADIA investment in Citigroup as the

8th

worst business deal of 2007. Forgetting the difference between debt and

equity, he complains that "Citi is paying out a stiff 11% coupon to the

Middle Eastern investment fund". Chap should read

more blogs, I think.

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