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
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.