Citi and Wells Fargo play tug of war for Wachovia
October 6, 2008 by Tisa Silver
Filed under Finance
Late last week, Wachovia agreed to merge with Wells Fargo in a $15 billion stock-swap.
Slight problem: Citigroup submitted a bid for Wachovia last Monday and is accusing Wachovia of violating an exclusivity agreement. Citi also accused Wells Fargo of “tortious interference.”
In the first round of court proceedings, a judge sided with Citi and blocked Wells Fargo’s pursuit of Wachovia. But, the ruling of the first court was overturned by an appellate court which issued a restraining order against Citi, charging that Citi took (and is taking) actions to cause the collapse and seizure of Wachovia.
Wells Fargo has Congress to thank, since last week’s bailout bill contains provisions regarding bank mergers and exclusivity agreements.
Who can blame Wachovia for seeking the best deal possible? Now, it looks as if the Fed is getting involved to see if both banks can snag a piece of Wachovia.
Citigroup should know that deals are made to be broken!
