Morgan Stanley (MS) has reached a deal to be the underwriter and advisor on the sale of the U.S. Treasury’s entire 27% stake in Citigroup (C), CNBC has reported.
The sale of the stock, considered one of the biggest offerings in history, will be conducted via a “dribble out” process, through which the Treasury will use Morgan Stanley as a sales agent, giving it direct directions on when, and how much to sell.
The offering will likely begin after Citi reports its next earnings on April 19, and can last for an indefinite period of time since the offering’s completion will depend fully on market forces. According to CNBC, the Treasury’s sales won’t account for any more than 10% of the average daily volume in a single day.
The government, which during the financial crisis directly invested $45 billion in Citigroup and backed over $300 billion of the bank’s real estate loans and securities, received $7.7 billion of Citi shares in return for its support during the financial crisis.
With a current pps of $4.31, Citi shares are worth around $32 billion, which would leave the government with an $8.2 billion profit, CNBC said.