Citigroup-led group wins China bank bid, Readers Digest is sold

US Bank leads purchase of Chinese bank group, the move is labeled controversial.

BEIJING — An investment group led by Citigroup Inc., the biggest U.S.
financial institution, has won a yearlong bidding war by overseas suitors with a
$3.1 billion offer for a stake in China's Guangdong Development Bank, a
Citigroup official said Thursday.
Guangdong Development Bank named the
Citigroup consortium the preferred bidder to buy the stake and operate the
mid-sized lender, said Robert Morse, chief executive of Citigroup Corporate
Investment banking for Asia.
A consortium led by the U.S. banking giant will
pay $3.1 billion for an 85.6 percent stake in Guangdong Development Bank,
according to a statement issued at a signing ceremony in Guangzhou, the capital
of Guangdong province.
Citigroup itself will have a 20 percent share of the
bank, which is owned by the provincial government, the statement said. This
complies with a 25 percent cap on foreign ownership in the banking
sector.
Its partners in the bidding group include several Chinese
companies.
Citigroup had been competing with a consortium led by Societe
Generale SA of France for control of the 500-branch bank.
The group now has
to apply with the China Banking Regulatory Commission for permission to have a
new shareholder.
As Beijing gradually opens the banking industry to foreign
competition, Chinese banks have sought out international lenders as strategic
investors to draw in both money and management skills.
Bidding for the
Guangdong bank had been unusually heated because a takeover would offer a rare
opportunity for a foreign investor to win management control of a mid-size
Chinese bank. But the idea of a foreign-led consortium taking majority control
of a Chinese bank is controversial.

Then the second part of the headline, with another company going private.

NEW YORK — Magazine publisher Reader's Digest Association Inc. said Thursday it
has agreed to be bought for about $1.61 billion in cash by an investment group
led by private equity firm Ripplewood Holdings LLC.
Ripplewood offered $17
for each share. Based on the almost 95 million shares the company had
outstanding as of Sept. 30, that puts the amount being offered at $1.61 billion.
The offer represents a premium of 10 percent over the stock's closing price
Wednesday of $15.51.
The private equity group will also assume Reader's
Digest's debt. In its filing with regulators for the quarter ended Sept. 30, the
company said long-term debt totaled $776.3 million.
Reader's Digest,
publisher of the eponymous general interest magazine, has been spending heavily
in an attempt to boost the circulation of the Reader's Digest magazine, as well
as the successful launch of the "Everyday with Rachel Ray" magazine and other
new offerings.
The company said it expects the sale to close in the first
quarter of 2007, subject to shareholder approval and other customary conditions.
Reader's Digest was advised by Goldman Sachs and Michael R. Lynch.
The
Ripplewood-led investment group includes J. Rothschild Group, GoldenTree Asset
Management, GSO Capital Partners, Merrill Lynch Capital Corp. and Magnetar
Capital.