Sempra's new clothes

25 January 2010 By George Hay Follow @gfhay

U.S. proposals to stop proprietary trading at banks may be making the investment bank have second thoughts on the price it should pay for RBS’s commodities JV. The price will give a sign of how worried banks are. But there are nonregulatory reasons for JPMorgan to be careful.

This content is for Subscribers only

Context News

JPMorgan could reconsider the price it is willing to pay for RBS Sempra Commodities following President Obama's proposed banking sector reforms, the Times reported on Jan. 23. The investment bank has been in exclusive talks to buy Royal Bank of Scotland's commodities trading joint venture but U.S. plans to ban banks from proprietary trading could prompt it to revisit its offer price, which could exceed $4 billion.

The mooted price would imply a 15 percent premium to RBS Sempra's book value. The Wall Street Journal reported on Oct. 12 that Citigroup had sold its Phibro energytrading business for the net value of the unit's assets to Occidental, the fourthlargest oil company in the United States.

RBS and JPMorgan declined to comment.

Email a friend

Please complete the form below.

Required fields *