A 2:1 split would not hurt shareholders, the opposite, it will help. My question is, why wouldn't Pandit just tell the USG that C will buy all 7M, why bother selling 20% first? Not a very creative story, but I liked his introduction, "privied information".
The arrangement was for a set price, payable via part capital, part credit from JpMorgan. But Citi will reduce the outstanding shares to 21.5 billion by doing this, and will be ready to do a 2-1 reverse split, bring that down to 10.7b. They will announce a divident shortly thereafter, it is rumored.