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  • Citigroup Inc.'s (NYSE:C) Student Loan Sued Over Discover Offer

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    Wednesday Sept. 22, 2010 at 09:12 am EST
    Citigroup Inc. (NYSE:C) Faces a Lawsuit Over Discover Offer
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    Citigroup Inc's. (NYSE:C) Student Loan Corp was sued by a Shareholder following a planned $600 million acquisition by Discover Financial Services. On SeptI. 17th Student Loan Corp, based in Connecticut was announced to be bought by Discover at $30/share, which was based on a 40% premium over the previous day's close. Alan R. Kahn, a shareholder filed a lawsuit against Student Loan Corp stating that Student Loan "is in desperate need to raise cash and divest non-core banking assets in the short term", and that the deal is "underpriced". This complaint was filed on Sep. 20 in Delaware Chancery Court in Wilmington. Kahn reported that directors of Student Loan are not following their duties to provide the best price, and have asked court to stop this takeover and to grant the case class-action or group-status on behalf of all external shareholders.

    Cititgroup Inc. identified more than a score of businesses for sale following 45$ billion bailout in 2008 of New York-based bank. Discover Financial, based in Riverwoods, IL will become the third-largest U.S. provider of private student loan following SLM Corp. and Wells Fargo & Co. Citigroup spokesman, Mark Rodgers said in an e-mail message that "We believe this lawsuit is without merit, and we intend to vigorously defend our position."
    Citigroup stock closed at $3.94 on Tuesday near resistance level of $3.97. The support levels below are at $3.8, $3.71 and $3.40. Resistance levels for Citigroup inc. - $4,.08, $4.25 and $4.98.

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