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The Best And Worst Bank Deals Of 2007

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by Felix Salmon
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Dec 11 2007 12:00am EDT

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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