Bear Stearns, CITIC to swap stakes
Updated: 2007-10-24 19:20
Bear Stearns Cos, a US investment bank that has been battered by slumping mortgage markets, and China's CITIC Securities Co have agreed to swap stakes in each other and form a broad alliance, the firms said yesterday.
The deal would bolster access to business in booming China for Bear, which lags bigger Wall Street rivals in expanding its business beyond the United States.
But Peter Goldman, a portfolio manager at Chicago Asset Management, which has invested $500 million and owns Bear stock, said investors might be disappointed that Bear did not land a large equity investor.
"It's different than what most people were looking for. It may be a little disappointing," Goldman said. "People thought there would be a huge capital infusion, not a quid pro quo business partnership."
Bear Stearns chairman and chief executive Jimmy Cayne reiterated that his company did not need a capital infusion. "We're in a very good position," Cayne said.
Bear shares were up $1.07 to $117.48 in afternoon trade on the New York Stock Exchange on Monday. The stock is down 28 percent this year amid the collapse of two Bear-run hedge funds and disruption in its fixed-income business, which has been hurt by widespread deterioration in the mortgage market.
|
|