In early pre-market the stock is up six bits at $33.94.
From the WSJ's Deal Journal:
Its like deja vu all over again. One of the world’s biggest multinational companies flounders amid dire predictions that it could go bust or be nationalized, and a deep-pocketed white knight from the Middle East stands at the ready.
This high-stakes drama is playing out right now in Abu Dhabi, where embattled BP CEO Tony Hayward is wooing the oil-rich sheikdom for a lifeline. The circumstances are eerily similar to when Citigroup’s Robert Rubin led whirlwind negotiations with the Abu Dhabi Investment Authority that led to a $7.5 billion investment for the nearly crippled bank in November, 2007.
BP’s charm offensive with Arab states seems to be a case of history repeating itself. If Hayward is able to secure an investment, which reports say could be near a 10% equity stake, then rest assured the terms aren’t going to be all that favorable. Abu Dhabi, the world’s biggest sovereign wealth fund, might be employing the “once burned, twice shy” school of negotiations.
Abu Dhabi’s Sheikh Ahmed bin Zayed Al Nahyan shook hands with Rubin to take a 4.9% stake in Citi that priced shares at $31.83 apiece, and now the New York bank’s stock is trading at about $4. At the time of the deal, Citi called Abu Dhabi “one of the world’s…most sophisticated equity investors.” The shares languished after a massively dilutive U.S. government bailout, and the sovereign wealth fund tried desperately to scuttle a deal that’s led to big losses....MORE