Wells Fargo, Citi Continue Battle For Wachovia

Wells Fargo & Co., which announced its acquisition of Wachovia Corp. last week, has issued a statement noting the binding nature of this agreement.

‘Wells Fargo and Wachovia have a firm, binding merger agreement. That agreement represents a transaction that, in stark contrast to Citigroup's proposal, provides significant and certain value to Wachovia shareholders, keeps Wachovia intact, is better for all of Wachovia's stakeholders – including its employees – and does not demand financial support from our government.’

Wells Fargo issued its statement following a decision by the Supreme Court of the State of New York to grant emergency injunctive relief extending the exclusivity agreement between Wachovia and Citi.

According to Citi, on Sept. 29, Citi and Wachovia both announced an agreement-in-principle for Citi to acquire all of the banking subsidiaries of Wachovia. At the time the Wachovia-Wells Fargo transaction was announced, Citi was finalizing the agreements required to consummate its transaction.

Citi further notes that it has been providing liquidity support to Wachovia since the day of the announcement and that it is ‘willing to enter into an agreement with Wachovia, which Citi believes would deliver powerful capabilities of the two entities to their respective stakeholders.’

In the latest twist, the Superior Court Division of Mecklenburg County General Court of Justice in North Carolina today issued a temporary restraining order prohibiting Citigroup from enforcing provisions of its takeover bid.

The provisions, issued in response to actions by two Wachovia stakeholders, constrain Wachovia's ability to negotiate other potential deals, and Wachovia had requested that the provisions be declared invalid, according to an AP report.

Meanwhile, the Wall Street Journal reports that the federal government is seeking to convince Citi and Wells Fargo to split Wachovia.

Sources: Wells Fargo, Citi, AP, Wall Street Journal


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