Abu Dhabi Wants Out of Its Deal to Buy Citigroup Stock

Imagine agreeing to pay between $31.83 and $37.24 a share now for Citigroup (C). With the stock closing below $4 Tuesday, anyone would say "no deal" to such an offer today. But that's exactly the deal the Abu Dhabi Investment Authority struck in 2007 when it agreed to invest $7.5 billion in Citigroup. The ADIA pumped billions into Citigroup in exchange for an 11% dividend until March of next year. Then, over 18 months starting on March 15, those equity units get converted into common stock -- at those $30-plus price levels. Needless to say, while that dividend looked great to the ADIA at the time, the price to swap now makes it a really bad bargain.