Sale of Wachovia Still Unsettled

Last week a deal for the sale of Wachovia to Citigroup appeared to be almost finalized. However, legal action taken over the weekend by Wells Fargo has allowed the company to re-enter the bidding process.

Over the weekend an appellate court overturned the ruling of a lower court essentially blocking the sale of Wachovia to Wells Fargo. The company now believes that the deal will go through allowing its acquisition of Wachovia.

In a New York court, a judge issue a temporary restraining order preventing Citigroup from using claims of exclusivity in their agreement to take over Wachovia. The judge also ruled that Citigroup has taken action recently deliberately designed to cause the collapse of Wachovia.

Early last week a deal between Citigroup and Wachovia was announced, with the Federal Deposit Insurance Company helping to broker the deal by guaranteeing to pick up some of the losses from the deal. However, the agreement fell through by week’s end, leaving Wells Fargo with another opportunity to acquire the company.

It is now believed that the Fed is trying to broker a deal between all three companies. In this scenario, Wells Fargo and Citigroup would each acquire a stake in Wachovia.

Source MarketWatch.com:

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