Update: Citigroup and Wells Fargo, under the guidance of the Federal Reserve, have called a truce until lunchtime Tuesday, in order to figure out a way to best divide up Wachovia.
Update: Citigroup is suing for $60 billion. Lawsuit below.
Update: As the battle for control of Wachovia rages on, the Federal Reserve is trying to come up with a solution that works for everyone, considering dividing Wachovia between Citi and Wells Fargo along geographic lines. Meanwhile, different divisions of Wachovia will go to each of its two suitors in a plan that would not require the government’s assistance.
No word on whether this King Solomon-like plan is just a ruse to see which of Wachovia’s suitors cares more about the bank, but that might be something for Wells Fargo and Citi to keep in mind.
WSJ: In a sign that the federal government is worried about the volatile battle for Wachovia Corp., officials from the Federal Reserve were pushing for Citigroup Inc. and Wells Fargo & Co. to reach a compromise. The effort could result in carving up the Charlotte, N.C., bank between its two suitors, people familiar with the situation said.
Update: Wachovia now suing to let the deal with Wells go through. And, there’s a none-too-happy Wachovia Vote No Sharholder Group: “The fact is that CITI is trying to steal Wachovia for $1 per share, when by their own actions they say the shares are worth $28.00 a piece and they are attempting to enlist the US Government to help them with their scheme.”
With all the posturing and negotiating this all sounds like a job for Ari Gold.
Earlier: Despite Monday’s announcement that Citigroup would buy Wachovia’s banking biz, Wells Fargo swept in and announced this morning that it would merge with Wachovia for $15.1 billion.
Dealbook: Wells Fargo said early Friday that it would merge with Wachovia — including the troubled Charlotte bank’s banking operations — in a $15.1 billion all-stock merger.
The announcement comes only four days after Citigroup agreed to buy Wachovia’s banking operations for about $1 a share, at the government’s behest and with a guarantee to absorb most of the losses on Wachovia’s massive loan portfolio. That deal, which Wachovia now appears to be spurning, would have left the Charlotte bank with only its securities and retail brokerage businesses.
Wells Fargo, based in San Francisco and considered one of the strongest banks amid the market turmoil, said that the deal requires no assistance from the Federal Deposit Insurance Corporation or any other government agency. It will raise up to $20 billion by issuing new shares, primarily common stock.
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