citics-close-call-with-bear-stearns

Citic's close call with Bear Stearns

JPMorganÆs takeover of Bear Stearns lets Citic off the hook but other bail-out investors may not be so lucky with their commitments to subprime-affected banks.
Citic Securities confirmed yesterday that it would not proceed with its investment in Bear Stearns, allowing it to scrap a deal to buy shares at $120 apiece in a bank which currently trades at $6. But a host of other investors who have bought into Citi, Merrill Lynch, Morgan Stanley and UBS are stuck with paper bought at significantly higher prices than current traded levels.

Citic Securities, which is part of Chinese state-owned conglomerate Citic Group, started talking to US investment bank Bear Stearns in the third quarter of 2007 after two Bear Stearns hedge funds were reeling from subprime losses and the investment bank had posted a large drop in profits. On October 22...
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