Citi’s Cheap Sale to Mexican Magnate Paves Way for Local IPO (1)

Mexican magnate Fernando Chico Pardo may have got his 25% stake in Citigroup Inc.’s Banamex on the cheap, but the sale should bolster the unit’s competitiveness and jump-start the bank’s almost four-year saga to exit Mexico, analysts said.

The sale, announced Wednesday, values Banamex at about $9 billion, less than its $11.2 billion book value, according to Wells Fargo & Co. analyst Mike Mayo.Although a “poor price,” the deal was “the least bad option to accelerate an exit from an investment that never seemed to make sense in the first place,” Mayo wrote in a note.

Citigroup decided ...