Occidental Petroleum (OXY), one of my favorite energy stocks, scored a big victory today by snatching up Phibro LLC, an energy-trading unit, from Citigroup (C). Since Citi has received so much aid from Uncle Sam, they’ve had to shed assets to keep themselves healthy.
The companies didn’t disclose the terms of the deal, but Occidental said that its total investment in Philbro will be about $250 million. Citi is probably very happy to get rid of Philbro because its head, Andrew Hall, was paid $100 million last year. That’s not exactly good PR when you’re getting tons of taxpayer money.
Of course, this misses the big picture: The reason Hall gets so much is that Philbro is very profitable. They weren’t the cause of Citigroup’s financial problems. This pickup is a big win for OxyPete. The stock is currently a member of my Blue Chip Growth Buy List.