Capital One Financial Corporation (NYSE:COF) aggressively pursued store credit-card portfolios, and two years ago secured the portfolio of Best Buy Co. Inc. (NYSE:BBY), which is believed to be worth about $7 billion. But in a surprise move Wednesday, Capital One announced that it is selling the very same Best Buy portfolio to Citigroup Inc. (NYSE:C).
Capital One Financial Corporation (NYSE:COF) became one of the biggest store-credit carriers just two years ago when it bought the portfolio from HSBC for about $2.5 billion, which included 23 merchants. Now the bank gives up a significant part of its overall portfolio to Citigroup Inc. (NYSE:C) – and this was a deal that has taken analysts and regular bank-watchers by surprise. No financial details about the deal have not been disclosed, but the hope is the deal would be closed by the third quarter of the year.
Citigroup Inc. (NYSE:C) has not comment on the acquisition at this point, and there is not official statement from capital One Financial Corporation 9NYSE:COF) either. At the end of Wednesday’s trading, Citigroup Inc. (NYSE:C) stock fell nearly 3 percent on the day to $43.22 per share, while Capital One Financial Corporation (NYSE:COF) fell more than 1.5 percent to $52.27 per share.
What do you think about this Citigroup inc. (NYSE:C) acquisition in the wake of all the going-private rumors and discussion surrounding Best Buy Co. Inc. (NYSE:BBY)? Are you surprised by the deal, and what do you think was the reason for Capital One Financial Corporation (NYSE:COF) making this move? We’d love your thoughts in the comments section below.
DISCLOSURE: I own no positions in any stock mentioned.
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