MarketWatch- Hedge fund manager Eddie Lampert has taken a stake valued at about $800 million in Citigroup Inc., a move that is driving up the stock and increasing speculation he may lead the charge for a break up.
Lampert’s ESL Investments Inc. disclosed it owned 15.2 million Citigroup shares worth more than $782 million as of the end of the first quarter, according to a Securities and Exchange Commission filing Tuesday. He added 4.37 million in his most recent purchase.
Citigroup shares climbed 3.4% to $54.59 in midday trading.
Lampert is known as a value investor who tries to turn ailing companies around. He earned $1.3 billion last year as ESL’s Sears stake, and investments in other companies such as AutoZone climbed strongly, according to Alpha magazine.
His investment is sure to fuel speculation that investors will push for a break-up of the financial services conglomerate. Citigroup has been under fire for its lackluster stock price and costs that have been rising faster than revenue.
“The stage is set,” wrote Punk Ziegel & Co. analyst Richard Bove in a note to clients. “The players have taken their positions and the game may be about to begin. It is unlikely that Mr. Lampert has taken a position of this size in Citigroup to only be a passive investor.”
Citigroup has announced a restructuring aimed at reining in costs and quelling dissent. The company said it will spend less on expansion and will slash 17,000 jobs as part of the effort.
