Attention Wachovia customers: Wells Fargo just rode on on that stagecoach thing of theirs and stole your bank from Citibank, says the NYT. Rather than pick apart the pieces of Wachovia, Wells Fargo is going to buy the whole darn thing.
The announcement came just four days after Citigroup had agreed to buy Wachovia’s banking operations of Wachovia for $2.2 billion of about $1 a share. But Wachovia, which is based in Charlotte, N.C., has now rejected that deal in favor of one where the entire company would be acquired. How Citigroup will respond to the news remained a question Friday morning.
In a statement, Wells Fargo, which is based in San Francisco, said that the deal required no assistance from the Federal Deposit Insurance Corporation or any other government agency.
Under the old deal, the FDIC agreed to guarantee losses above $42 billion in exchange for stock and warrants worth about $12 billion, says the NYT.
As far as the mortgage meltdown goes, Wells Fargo didn’t take the risks that many other banks did, and are therefore in a good position to acquire Wachovia. It also did not have a big investment bank, so was spared the recent investment banking bloodbath.