Citigroup Abandons Wachovia Bid, but not its Lawsuit
Citigroup has given up its bid for Wachovia, but it hasn’t abandoned a state court lawsuit over what it contends is a violation of an exclusivity agreement it had with the bank as it worked out details of its $2.2 billion buyout offer.
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 consummated as a result of Citigroup’s decision to abandon the buyout.
Citigroup contends 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,” says a statement issued by Citigroup. “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 the Wall Street Journal (sub. req.).
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.
Hat tip to the Wall Street Journal Law Blog.
