Rus News Journal

Wachovia have not allowed to be on sale

to Anybody, except Citigroup

On Saturday the court of state of New York has blocked the concluded bargain the day before on purchase of bank Wachovia by financial company Wells Fargo. On a judgement the bank should be sold Citigroup according to the arrangement reached in the beginning of the past week. Thus that Wells Fargo offers for Wachovia 15 mlrd dollars while Citigroup - only 2 mlrd the dollars, at last have appeared solving argument - support of the government of the USA.

Wells Fargo suggested to buy all business Wachovia through the exchange of actions estimating papers Wachovia in 7 dollars for a piece that on 80 % above their cost following the results of the auctions of Thursday (3,9 dollars) And seven times more than has offered Citigroup on Monday. Then Citi has agreed upon acquisition of bank business Wachovia. Offer Citi besides partition Wachovia assumed active state participation: the Federal corporation of insurance of deposits (FDIC) within the limits of the transaction has agreed to incur all potential losses on actives Wachovia, exceeding 42 mlrd dollars “ the Present transaction will allow us to keep Wachovia entirely and to keep cost of the integrated company without state participation “ - ­ general director Wachovia Robert Steel has commented on offer ­ Wells Fargo. Boards of directors of both companies have approved the transaction, without having thought, as the rejected buyers will concern it from Citigroup.

Sale Wachovia Citigroup also has been approved by boards of directors of the companies and waited for the consent of shareholders and the authorities. Besides, initially the agreement assumed ekskljuzivnost negotiations between banks. On Friday Citi has called Wachovia and Wells to stop the transaction and all actions connected with it, having threatened with the “ the essential legal rights “. “ They not only miss the good transaction, but also receive the dangerous competitor. Wells transforms itself from regional bank to the player of a national team: it becomes not only the largest retail bank in the USA, but also the strong broker company “ - analyst Aite Group of Alois Priker has noted daily. The transaction would allow Wells to become the largest retail bank in the USA and the third on size as a whole from 10 thousand branches, deposits in 787 mlrd dollars and actives in 1,4 trln dollars “ Vikram Pendit and board of directors Citigroup have received on a forehead “ - president Smith Asset Management William Smith has shared with daily. Possibly, around Wachovia serious struggle will be developed: according to the American mass-media, Citi considers not only claim giving, but also increase of own offer. FRS has declared that regulators will analyse offer Wells. FDIC has expressed in favour of Citi. Experts believe that it is favourable to authorities not to participate in the transaction.

this very day Citigroup has declared that Wachovia, having concluded the bargain with Wells Fargo about merge, has roughly broken ekskljuzivnost the agreement with Citigroup, the prisoner with support of the government of the USA. Besides, the American bank considers that Wells Fargo, in turn, has roughly interfered with the exclusive agreement between Citigroup and Wachovia. As has reminded Citigroup, conditions of the agreement with Wachovia about sale of bank business assume that Wachovia has no right to enter negotiations with the third parties. In this connection Citigroup insisted on that Wells Fargo and Wachovia have as soon as possible terminated the concluded bargain.

The Judge of court of state of New York Charles Ramos recognised claims Citigroup completely lawful, having decided that Wachovia has broken the obligation given earlier not to carry on negotiations about absorption with anybody, except Citigroup. In what degree the judgement was affected by that on party Citigroup the ­ state in the name of FDIC has actually acted­, it becomes clear in process of the further succession of events round sale Wachovia. Probably, attraction of the state structures becomes in the USA in the conditions of crisis by solving argument in interbank ­ disputes.