Citic Doesn’t Go Over the Cliff with Bear Stearns
March 19th, 2008Late last year China’s CITIC Securities announced a cross-investment arrangement with Bear Stearns. According to the reported terms, Citic would have paid USD 1 billion to get 6% of Bear Stearns’ stock. Now that Bear Stearns is, ah, no longer, Citic says the deal is off.
Interestingly, no money had apparently changed hands yet, and according to this Reuters report there was not, despite the wide publicity the deal received, a written agreement so requiring. Surely there was an MOU at least, and any more developed recitation of the deal’s terms would probably allow Citic to walk away in the event of a “material adverse change,” but in any case Citic must be glad it kept its money in its own hands. Many Bear Stearns shareholders have seen their shares fall in value from $160 about a year ago to, well, just $2 as valued in the weekend sale to JPMorgan Chase (and less than $6 at today’s close, presumably on speculation the deal will not go through as struck).