DealZone

With Citi’s shares in freefall, down another 10 percent in Europe after slumping 23 percent yesterday to a fresh 13-year low, news that Saudi Prince Alwaleed bin Talal will boost his stake to 5 percent couldn’t have come at a better time for the bank.

Perhaps worth as much as the money to CEO Vikram Pandit, Alwaleed said he was backing management. Pandit is in desperate need of a benefactor. As Jon Stempel reports, the bank’s shares have fallen 78 percent this year. The latest rout began after news of a big cost-cutting initiative. If you can’t pump up your stock by lopping off a fifth of your costs, a crisis of confidence is probably around the corner.
 
For two years now, Citi has been drawing on something more than confidence, with sovereign wealth funds, the prince and the U.S. government tossing it upwards of $100 billion. 
 
The bank has lost $20.3 billion in the last year and taken tens of billions of dollars of writedowns on mortgage and other toxic debt. Analysts expect it to lose money in the fourth quarter, and some don’t expect it to be profitable in 2009.
 
Could the prince – Citi’s biggest single shareholder – put the whole market on his shoulders? Futures turned up on the news as well. 

Deals of the day:

* Japanese trading house Itochu said it would buy a 20 percent stake in Chinese food processing company Ting Hsin for $710 million to take further advantage of fast-growing demand.

* Spanish foods group Ebro Puleva will initiate exclusive talks with British Sugar over the sale of its Azucarera sugar subsidiary, a company source told Reuters.

* Hong Kong’s First Pacific will acquire 20 percent of Philex Mining for 6.2 billion pesos ($123.4 million), the Philippine company, the country’s biggest miner, said.

* Australia’s competition watchdog refused to approve a cooperation agreement between Air New Zealand and Air Canada, saying it would harm competition on the Australia-Canada route.

* Egypt-based mobile operator Orascom Telecom said it had agreed to sell its service company OrasInvest to Abu Dhabi Investment for $180 million.