C Citigroup Inc

By Kimberly Chin 

Citigroup Inc. has agreed to give activist investor ValueAct Capital Partners LP greater insight into its strategy, governance and operations without giving it a board seat.

The New York bank said Friday it has entered into an information-sharing and engagement agreement with ValueAct Capital, which will give the hedge fund access to confidential information and the ability to work directly with members of Citi's management team and board.

According to the companies, ValueAct owns approximately 32 million of the issued and outstanding shares of Citigroup common stock. According to FactSet, Citi has 2.4 billion shares outstanding, giving ValueAct roughly a 1.31% stake. Based on Thursday's close, the stake is valued at $1.8 billion.

In the agreement, ValueAct is required to support the management and the board throughout the term of the agreement, which ends in December 2019.

The bank said that ValueAct won't be pursuing a board seat at this time. ValueAct has a board member at Alliance Data Systems Corp., a Citi competitor.

Should situations change, Citi would also be open to considering a likely proposal by ValueAct to put forth a candidate for a board seat, the company said in a statement. A proposed candidate would still go through the usual process for director candidates.

ValueAct began amassing its stake in the bank in late 2017. According to a letter to its investors reviewed by The Wall Street Journal last year, ValueAct noted that Citi's advantage is its "old-fashioned treasury management for global businesses" that is in an important part of the plumbing in the global financial machinery, positioning it well in businesses such as foreign-exchange and debt underwriting for multinational clients.

Write to Kimberly Chin at kimberly.chin@wsj.com

(END) Dow Jones Newswires

January 11, 2019 09:44 ET (14:44 GMT)

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