Citigroup’s planned divestment of Banamex reveals a stark valuation gap, with offers far below peers. A future IPO may recover value, but weak market depth, regulatory overhang and investor skepticism make the outcome far from certain.
Banamex, Citi's branch in Mexico, was once a core pillar of the bank's operation into international markets. Bought in 2001 for what are now 20 billion dollars, Citi purchased this government-owned bank near the end of Mexico's rapid economic recovery from the late 1990s. It presented the attractive opportunity of buying what was the national bank of a major developing country for seemingly cheap. Today however, it sits at the center of a difficult and uncertain divestment process. What makes the situation particularly striking
