Citigroup Inc. said the Abu Dhabi Investment Authority is seeking to end an agreement to buy the bank’s stock for more than 8 times its current price, or to receive more than $4 billion in damages if the deal is upheld.
Abu Dhabi Investment, one of the world’s top two sovereign wealth funds, filed a claim alleging “fraudulent misrepresentations” tied to its agreement to buy $7.5 billion of common stock, Citigroup said yesterday in a statement. The claims have no merit, Citigroup said. Abu Dhabi would acquire the shares for $31.83 to $37.24 apiece, under the agreement.
The New York-based bank announced this week that it would sell common shares to help repay $20 billion in bailout funds to the U.S. government. “It is going to be tough” for Abu Dhabi to evade losses tied to the agreement, said Eric Barden, chief investment officer of Barden Capital Management in Austin, Texas.
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