An article in the Wall Street Journal describes the following financial deal: “Private-equity firm KKR & Co. sold 15 million shares of Walgreens Boots Alliance Inc. to Citigroup Inc…. The bankers paid $80 a share and reoffered the shares to clients for $80.10, aiming to make as much as $1.5 million.”
a. What is a private equity firm?
b. What investment banking activity was Citigroup performing in this deal?
c. Was Citigroup certain to make a profit on this deal? Briefly explain.