Citigroup announced late Saturday that it had persuaded a New York judge to temporarily block Wells Fargo from acquiring Wachovia, firing the first shot in what could be a prolonged legal battle.
Citigroup has accused Wells Fargo of wrecking its plan to acquire Wachovia’s banking operations for $2.2 billion, or $1 a share, in a deal arranged by the Federal Deposit Insurance Corporation. Four days after that deal was struck, it fell apart when Wachovia agreed to Wells Fargo’s offer to pay seven times as much for the entire company.
The underlying battle is over which company will emerge from the economic crisis in a stronger position among a smaller number of financial giants. Citigroup contends that the deal with Wells Fargo violates an agreement that prohibited Wachovia from having any sale or merger discussions with anyone other than Citigroup until Oct. 6.
The order issued by a judge on Saturday extends the term of that agreement until further court action, Citigroup said. A person briefed on the situation said that Citigroup was seeking $60 billion in damages from Wells Fargo for interfering with the initial transaction.
Efforts to reach a Wells Fargo representative late Saturday night were unsuccessful. Christy Phillips-Brown, a Wachovia spokeswoman, said the bank “believes its agreement with Wells is proper, valid, and is in the best interest of shareholders, employees and American taxpayers.”
In case you’ve been asleep for the past week, these are kind of the greedy thugs the Americans are bailing out with hundreds of billions of taxpayer dollars.
Courtesy of Congress and the White House.
This sounds like a setup..
WHY have a DEAL arranged, if 1 side cant jump out of the deal, IF they are going to make money, and save their company.
If Wells Fargo wants to pay more, then they should win the bid. We are still a capitalist society, aren’t we?
If this deal goes to Citibank, the FDIC will have a lot of explaining to do.
I expect this deal to be held up in the courts and the FDIC end up putting out a lot of money until a clear winner emerges.
Some Free Market system, where they run to, and expect, the government to bail them out and protect their contracted deals. And yet chafe against regulation designed to protect the investing public, from these companies’ excesses. Seems as though they get to pick and chose which regulations they like, and how much and how often the government helps them out when things go wrong. If only the average taxpayer had this kind of a socialized welfare for fixing their mistakes. But we don’t because we only VOTE for these bastards in office. We don’t bribe (er, lobby) the living sh*t out of them!
4,
then we make trade agreements with Harsher laws then are on the books.
The USA, Corps gather ALL the excess food stocks and then SELL to other countries, at PREMIUM prices…