Last month as the era of the standalone investment bank came to an abrupt end, Goldman Sachs & Co. approached Citigroup Inc. about acquiring it, only to be immediately rebuffed. According to a
report in the Financial Times, Goldman chief Lloyd Blankfein called Citi's Vikram Pandit to discuss a tie-up after markets were rocked by fallout from the bankruptcy filing of Lehman Brothers Holdings Inc. on Sept. 15.
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Long considered the gold standard of the investment banking world, the
mere fact that Blankfein made such a call underscores the amount of
pressure that Goldman was under prior to the government's $700 billion
bailout. The FT said the call was "made at the tentative suggestion of
the regulatory authorities or at least with their blessing," and
followed the fast-track approval of Goldman Sachs from an investment
bank in a commerical bank on Sept. 21. Goldman's market cap was
roughly $108 billion at the time. The brief conversation ended with Pandit rejecting the proposal at once.
Since then, the Federal government has agreed to
inject $10 billion into Goldman Sachs with the purchase of preferred shares, and the bank is also
planning layoffs to cut costs.
- George White
See FT storySee Dealscape post on Goldman layoffs See Dealscape post on bailout
See Crisis on Wall Street Dealwatch
