Billionaire Saudi prince lifts Citigroup stake to 5%

Prince Alwaleed, the billionaire Saudi investor, yesterday revealed that he had bought a further $500m (£319m) of shares in Citigroup, taking his stake in the US bank to $10bn.

"Citigroup is very cheap, too cheap at current prices," said the 45-year-old nephew of King Fahd and the bank's biggest shareholder.

It is his investments in Citigroup that have made the reputation of the Prince, who is ranked by Forbes magazine as the sixth richest man in the world with a fortune of $20bn. He first started buying shares in the bank in 1991 when he acquired $590m worth in what was seen as a rescue investment. The bank, then called Citicorp, had suffered huge losses in New York property and Third World debt and there were fears it might go under. He bought a 9.9 per cent stake at a knock down price and the bank soon recovered and became a global powerhouse once more.

It was described as "one of the best deals anyone did in the 1990s".

The Prince has frequently bought and sold shares in Citigroup since, most recently buying another $500m worth in March. Few details were disclosed yesterday, with only the briefest of statements faxed from his Riyadh-based investment company, Kingdom Holdings. It merely quoted the Prince as saying: "Citigroup's share price was attractive to buy" and went on to describe the bank as "the world's most profitable company".

But Prince Waleed's record is mixed. He has acquired stakes in many of America's best-known businesses and in 2000 alone put $50m each into Coca-Cola, PepsiCo, Ford, Gillette, Procter & Gamble, McDonald's and Walt Disney.

He once had a $1bn stake in AOL and $400m in Compaq.

But he came a cropper in the dot.com boom when he invested a fortune in a string of technology companies, including WorldCom.

After the internet bubble had began to deflate, the Prince sensed an opportunity went on an investment spree. He bought $50m of shares in Priceline, the reverse auction company and then doubled his stake when the shares fell (they continued to nosedive). He put a further $50m each into Amazon.com, eBay, Infospace and Doubleclick.

His reputation as a rescuer of troubled companies meant he was the first port of call for many a cash-strapped corporate. Some did well, such as his $65m investment in the property developer Canary Wharf, which soared in value as the Docklands development took off. Others did not, such as his stake in Kirch, the failed German media group.

Over the years he has had large stakes in a long list of major companies such as Apple Computer (5 per cent), Saatchi & Saatchi (5.5 per cent) and News Corporation (3 per cent).