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TALK BACK:Wachovia Would Be 'Chunks' Without Citi Pact:Reader Font size: A | A | A 9:00 AM ET 10/8/08 | Dow Jones RELATED QUOTES
8:02 PM ET 10/7/08 Symbol Last % Chg C 15.15 0.00% WB 5.25 0.00% WFC 30.60 0.00% Real time quote.
A reader from Saginaw, Mich., responds to a previous Talk Back comment on Kevin Kingsbury and Dan Fitzpatrick's story "Citi Seeking At Least $60B For Busted Wachovia Deal":
I disagree with Vicente, who states that the Federal Deposit Insurance Corp.'s Sheila Bair should put her foot down.
Wachovia was going to be liquidated. Citigroup offered money. Wells Fargo did not. Wachovia signed a deal with Citigroup. If Citigroup had not signed, Wachovia would be chunks today.
Then Congress passed the bailout program. THEN Wells Fargo offered more money. Where was Wells Fargo when Wachovia was going to be liquidated? They thought it was too much risk and wanted no part of it, especially since the House had turned down the bailout bill.
And then once Congress acted, Wells Fargo decided to get involved.
I think Citigroup is within its rights.
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Here's the previous Talk Back comment, written by Vicente in Miami:
Citigroup (C) wants to make a quick and easy $60 billion from Wachovia (WB) and Wells Fargo (WFC), rather than generating "normal profits from operations."
First, Citi wanted the Federal Deposit Insurance Corp. to fund the purchase of Wachovia (the bank only) at the expense of Wachovia's shareholders, employees, and customers. Now, Citi wants to suck out as much as possible from these two fairly healthy financial institutions.
FDIC Chairman [Sheila] Bair must put her foot down and put an end to these unacceptable shenanigans by Citigroup, otherwise it will set a bad precedent within our banking system.
And here is the original story:
Citi Seeking At Least $60B For Busted Wachovia Deal
By Kevin Kingsbury and Dan Fitzpatrick
Of DOW JONES NEWSWIRES
Citigroup Inc.'s (C) lawsuit against Wachovia Corp. (WB), Wells Fargo & Co. (WFC) and their directors is seeking at least $60 billion, Citi said as it seeks redress for Wells Fargo reaching a deal to acquire struggling Wachovia.
Citi had reached an agreement in principle last Monday to buy Wachovia's banking operations for $2.16 billion, but Wells Fargo swooped in and announced early Friday a $15.1 billion deal to buy all of Wachovia. Citi immediately cried foul, prompting Saturday's suit.
The company is seeking more than $20 billion in compensatory and more than $40 billion in punitive damages from Wells Fargo for tortuous interference with Citigroup's deal with Wachovia. Citigroup is also seeking undisclosed "relief" from Wachovia for breaking their deal.
Legal wrangling over the weekend prompted officials from the Federal Reserve to push for Citigroup and Wells Fargo to reach a compromise, one in which could result in the two carving up Wachovia, people familiar with the situation told The Wall Street Journal.
The New York legal fight revolves around the validity of an "exclusivity agreement" Wachovia signed when it reached its deal with Citigroup. A lower-court judge Saturday extended the expiration to Friday from Monday, but an appeals court on Sunday overruled that decision.
Without some sort of compromise, the fate of Wachovia could drag out for weeks or months in a legal battle that would leave the battered bank in limbo, distracted by controversy and further weakened by the mountain of bad loans that led to its government-engineered deal with Citigroup last week.
Citi shares were recently down 9% at $16.68 while Wachovia was off 8% to $5.72 and Wells Fargo edged down 5% to $32.72.
The lawsuit was filed Saturday at the Supreme Court of the state of New York in New York County. Citigroup released a copy of the suit Monday along with a statement in which the New York company said it "remains willing to enter into an agreement with Wachovia which Citi believes would deliver powerful capabilities of the two entities to their respective stakeholders."
According to the lawsuit, had Citigroup not reached its $2.1 billion deal with Wachovia on Sept. 29, the Charlotte, N.C., bank "would have failed the following day and the debt issued by its holding company would have collapsed, with potentially devastating implications for the stability and security off the financial markets."
Citigroup also alleges in the suit that the Wells Fargo deal "triggered the golden parachutes of Wachovia CEO Robert Steel and its other senior executives," enabling the executives to "bestow upon themselves a $225 million windfall."
A Wachovia spokeswoman said Monday that the company hadn't received the lawsuit.
In an email to Wachovia employees, Steel said the bank's agreement with Wells Fargo, of San Francisco, "is proper and valid. The agreement is in the best interests of shareholders, employees, creditors and retirees, as well as the American taxpayers, which is why our board of directors approved it."
The ongoing legal wrangling is "a fact of business life when interested parties disagree," Steel added.
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10-08-08 0859ET
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Interesting opportunity here to make some money on moves
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Fed OKs Wells Fargo takeover of Wachovia 14 minutes ago - Xinhua Financial News
Related Companies Symbol Last %Chg WB 5.15 43.06% WFC 28.31 3.89%
As of 4:04 PM ET 10/10/08 The Federal Reserve said on Sunday it approved the takeover of Wachovia Corp and its banking subsidiaries by Wells Fargo & Co of San Francisco.
The Fed decision formally made Wells Fargo the victor in a battle between it and Citigroup which also had sought to acquire the Charlotte, North Carolina-based bank. Citigroup dropped out of the chase last Thursday.
(Reporting by Glenn Somerville; Editing by Andrea Ricci) Keywords: FINANCIAL/WACHOVIA tf.TFN-Europe_newsdesk*thomson.com ak
I have not been able to find the buying price they settled on but rumour has it around $7.00.. So it looks like this one will be on the top of the list for monday for me o watch....Cheeze ,, watch list now up to about 20 stocks for monday and not enough money to go around .....
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posted
Seems like they decided on $5.42 buy price::::: Which was close to fridays high of $5.20
DOW JONES NEWSWIRES
Moody's Investors Service placed its ratings on Wells Fargo & Co. (WFC) under review for a possible downgrade after Wells Fargo reaffirmed it is planning to merge with Wachovia Corp. (WB) as discussions with Citigroup Inc. (C) on the matter ended. The ratings firm also raised Wachovia's preferred stock rating by six notches to A3 - which designates satisfactory credit quality - in response to Wells Fargo's intent to assume all debt obligations of Wachovia. The rating previously was three steps into junk territory. Moody's said it will review Wachovia's financial-strength rating and long-term debt and deposit ratings for possible upgrades. The financial-strength rating previously was on review for downgrade while the other ratings were uncertain. Moody's also placed all of Wachovia's long-term ratings on review for an upgrade, and left Wachovia's RI (middle) and Wachovia Bank N.A.'s R-1 (high) short-term ratings under review with developing implications. On Thursday, Citi gave up its efforts to block Wells Fargo's purchase of Wachovia. Citi had originally agreed Sept. 29 to buy Wachovia's banking operations in a deal brokered by the Federal Deposit Insurance Corp., but the arrangement was upended by Wells Fargo's richer bid last Friday for all of Wachovia. Wells Fargo said Thursday it would move ahead with the transaction, which it expects to close before the end of the year. Its agreement to buy Wachovia for about $5.42 a share in stock has been approved by both boards. Moody's said the credit challenges of the acquisition center on integration risks and the possibility Wells Fargo's risk profile could increase. However, the ratings firm did acknowledge the acquisition will substantially broaden Wells Fargo's banking business and could improve franchise value. Moody's said its review will focus on six factors, including the potential credit costs Wells Fargo faces in its portfolios and the portfolios of Wachovia. The firm will also look at the impact the potential losses could have on Wells Fargo's capital and the potential franchise enhancement the purchase brings to Wells Fargo. In a separate release, Moody's said Wachovia's ratings will be depend on the outcome of Wells Fargo's ratings, which are higher than Wachovia's. Last week, Moody's cut Wachovia's preferred stock six notches into junk territory to Ba3 because Citi said it didn't intend to assume Wachovia's preferred securities, "raising the possibility that they would be part of the capital structure in a highly leveraged entity." Moody's affirmed the Prime-1 short-term ratings of both Wells Fargo and Wachovia. Wells Fargo shares closed Friday at $28.31, up 3.9%, while Wachovia closed at $5.15, up 43%. -By Shara Tibken, Dow Jones Newswires; 201-938-2168; shara.tibken*dowjones.com
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