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Citigroup Gives Up Bid for Wachovia
Published: October 10, 2008
New York--Citigroup has given up its bid for Wachovia, but not its state court lawsuit, in which the company is taking on Wachovia and Well Fargo for violation of an exclusivity agreement it had with Wachovia as it worked out details of its $2.2 billion buyout offer a couple of weeks ago.
Ending the fight for the bank, federal antitrust regulators today approved the acquisition of the Wachovia Corp., by West Coast based Wells Fargo.
Citigroup plans to seek $60 billion in damages, The New York Times reports. Wachovia negotiated a better $15 billion deal with Wells Fargo that may be sealed as a result of Citigroup’s decision to abandon the buyout.
In a statement issued by Citigroup it states that ‘its shareholders have been unjustly and illegally deprived of the opportunity to buy Wachovia. Citi believes that it has strong legal claims against Wachovia, Wells Fargo and their officers, directors, advisers and others for breach of contract and for tortious interference with contract. However, Citigroup has decided not to ask that the Wells Fargo-Wachovia merger be enjoined.”
Citigroup will seek internal e-mails and cell phone records for Wachovia and Wells Fargo executives as well as their lawyers and advisers, according to a report in the Wall Street Journal.
Citigroup sought to block the Wells Fargo buyout last weekend with a trip by its lawyers to the Connecticut home of a New York judge. A state appeals court later ruled the judge had no authority to delay the deal.
Litigation was later put on hold as Citigroup and Wells Fargo discussed a possible agreement to carve up Wachovia.
As earlier reported, the question about Wachovia Multifamily Capital remains unanswered for now. No decision has been taken yet to leave or remove Wachovia as a Fannie Mae DUS lender (Wells Fargo is also a DUS lender). A Fannie Mae spokesperson told MHN it is too early to tell whether Wachovia will remain as a DUS lender. Meanwhile, Eileen B. Fitzpatrick, senior communications specialist at Freddie Mac, told MHN the decision on how Freddie will list Wachovia as its Seller/Servicer, has not been made yet.
When MHN asked the question about Wachovia Multifamily Capital’s fate, Wells Fargo sent the following statement in an email. “We don't have anything further to contribute beyond what we've said in our recent public statements.”
