"Ailing Wachovia called focus of bidding war; Citigroup, Wells Fargo are suitors" by Eric Dash and Andrew Ross Sorkin, New York Times News Service | September 29, 2008
Citigroup and Wells Fargo were locked in a bidding war yesterday over a possible emergency takeover of Wachovia Corp., people involved in the talks said.
The intense negotiations come as concern grew about Wachovia's stability on Friday, the people said, despite a breakthrough reached yesterday by congressional negotiators on a $700 billion bailout for the financial system.
The government has been involved in the talks as well, these people said. But so far, the government is resisting pressure to help bidders by guaranteeing a part of Wachovia's assets the way it did for Bear Stearns when it was sold to JPMorgan Chase in March. The government has also opposed taking over Wachovia the way it did Washington Mutual last week, these people said, unless its financial position deteriorates more rapidly.
The deal would vastly expand access to more stable customer deposits, so it could rely less heavily on outside investors for funds. Bank executives there see this as game-changing opportunity. Still, both Citigroup and Wells Fargo have serious concerns about taking on Wachovia's $800 billion loan portfolio. --more--"