Credit Crisis Update: Proposed Bailout Faces Opposition
Sep 24th, 2008 | By Jennifer Yousfi | Category: Financial News“Nomura’s track record outside Japan has always been a bit spotty,” Peter Hahn, a Cass Business School fellow and a former Citigroup Inc. (C) banker in London, told Bloomberg News. “Here, they are buying someone with a fairly good track record. Whether they can then capitalize on it remains the issue.”
In addition to Lehman’s London headquarters, the deal includes investment banking and equities operations in the Netherlands, Qatar, Dubai, and Kuwait.
Kenichi Watanabe, Nomura’s chief executive officer, said in a company statement: “In the past 24 hours Nomura has executed two transformational deals. This transaction will significantly extend our European footprint and international reach, enabling us to realize our strategy of delivering Asia to the world. Our immediate priority is to get the equity and investment banking divisions back in business operating under the Nomura name.”
On Monday, Mitusbishi UFJ Financial Group Inc. (ADR: MTU) agreed to purchase a 10%-20% stake in Morgan Stanley (MS) for about $8.4 billion. A 20% stake would make Mitsubishi UFJ Morgan Stanley’s largest shareholder, which means a company representative will be appointed to the bank’s board.
Buffett Backs Goldman
One U.S. bank got a huge vote of confidence from the domestic sector in the form of iconic investor Warren Buffett. The Oracle of Omaha’s Berkshire Hathaway Inc. (BRK.A, BRK.B) will make a $5 billion investment in Goldman Sachs Group Inc. (GS).
“Goldman Sachs is an exceptional institution,” Buffett said in a statement. “It has an unrivaled global franchise, a proven and deep management team and the intellectual and financial capital to continue its track record of outperformance.”
Goldman Sachs wasted no time in pointing out that the capital infusion would strengthen its balance sheet and instill investor confidence in one of the last remaining independent Wall Street firms.
“We are pleased that given our longstanding relationship, Warren Buffett, arguably the world’s most admired and successful investor, has decided to make such a significant investment in Goldman Sachs. We view it as a strong validation of our client franchise and future prospects,” said Lloyd C. Blankfein, Goldman Sachs chairman and CEO, MarketWatch reported. “This investment will further bolster our strong capitalization and liquidity position.”
In addition to the preferred stock investment from Buffett, Goldman Sachs plans to sell $2.5 billion in common stock.
Source: Credit Crisis Update: Proposed Bailout Faces Opposition, Wall Street on Sale
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