2008-10-03 — bloomberg.com
Citigroup Inc. demanded that Wells Fargo & Co. and Wachovia Corp. terminate a $15.1 billion takeover agreement announced today, saying it breached an exclusive deal the New York-based company reached earlier this week.
"Citi has substantial legal rights regarding Wachovia and this transaction," the New York-based company said in a statement. "Wachovia's agreement to a transaction with Wells Fargo is in clear breach of an exclusivity agreement between Citi and Wachovia."
This is also of interest: Wells Fargo: Losses from Wachovia assets to be $74 billion.
And in our forums, an even stronger point here:
Citigroup has a binding contract which will prevent the sale/merger of Wachovia to Wells Fargo, regardless of the Wells Fargo deal's economic merits. The only way for Wachovia to get out of that agreement with Citigroup will be for Wachovia's parent company to file a Chapter 11 bankruptcy. Anyone who is selling Citigroup stock based on this situation should think twice. Anyone who is buying Wachovia stock based upon Wells Fargo's bid is very, very foolish. Anyone who is buying Wells Fargo's stock based upon Wachovia's appearance of agreement to sell/merge itself with Wells Fargo is equally foolish.
Note: Comments may take a few minutes to show up on this page. If you go to the forum thread, however, you can see them immediately.