Wachovia deal may reach compromise
There are reports that both Citigroup and Wells Fargo may be able to reach a compromise on the takeover of Wachovia, splitting the branches between the two banks. Jeremy Hobson reports why the Fed is pushing for the deal.
A woman walks by a Wachovia branch (Karen Bleier/AFP/Getty Images)
More on Mergers/Acquisitions, America's Financial Crisis
TEXT OF STORY
Renita Jablonski: You can call it a corporate cat-fight, but Citigroup and Wells Fargo are duking it out over Wachovia. Federal officials are trying to mediate the fight. You may remember early last week when Citigroup had a deal to buy Wachovia. That deal was challenged Friday, when Wells Fargo announced its own bid for the bank. This morning, there are indications of a Solomon-style compromise. Jeremy Hobson has more.
Jeremy Hobson: There are reports of a deal being pushed by the Federal Reserve, which wants Wachovia to find a suitor ASAP to stabilize the nation's banking system. The deal would likely split Wachovia's branches between Citi and Wells Fargo. New York-based Citi would get the Northeast, San Francisco-based Wells would get the Southeast and California.
The possibility of a compromise follows a weekend of legal wrangling over whether Wachovia should have pursued an offer from Wells Fargo after agreeing to have its banking operations taken over by Citi for just over $2 billion. In that deal, the FDIC would have shouldered most of the losses on Wachovia's books.
Whether the FDIC is off the hook in whatever deal gets worked out in the end, it will surely be comforting to federal officials to know people are finally fighting over a bank again.
In New York, I'm Jeremy Hobson for Marketplace.
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From Riverside, CA, 10/06/2008
What happened to the Texan stock broker that made financial stores on Friday interesting. Will he be coming back?
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