Citi shares rise after sale of Japanese unit

NEW YORK - Citigroup Inc. shares rose Monday, a day after the company said it would sell a majority stake in a Japanese unit for $1 billion in cash.

The jump in shares also comes after a regulatory filing late Friday showed prominent hedge fund manager John Paulson's firm, Paulson & Co., acquired 300 million shares of Citi's common stock during the third quarter.

Citi shares rose 19 cents, or 4.9 percent, to $4.24 in late morning trading Monday. The stock has ranged from 97 cents to $10.11 over the past year.

On Sunday, Citi said it will receive $1 billion for a 93.5 percent stake in Bellsystem24, Japan's leading call center operator. Private equity firm Bain Capital Partners is buying the controlling stake in Bellsystem24.

The sale bolsters Citi's financial position and is another step in its move to shed noncore assets as it tries to recover from the credit crisis. Citi, one of the banks hardest hit by the downturn, received $45 billion in government aid. The government converted a majority of that bailout money into a 34 percent ownership stake in New York-based Citigroup. The remaining government funding has yet to be paid off.

Citi's recovery plan and low stock price led to at least one major new investor as the bank continues to reconfigure its operations. Paulson purchased 300 million shares during the third quarter after holding no shares in the company at the end of the second quarter, according to the regulatory filing with the Securities and Exchange Commission.

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