Wachovia Lawyer Cites Talks on ‘Grand Solution,’ but Some Snags Reported
Wachovia lawyer David Boies said talks between Wachovia Corp. and possible buyers Citigroup and Wells Fargo center on “a possible grand solution,” according to a transcript of a teleconference with a New York federal judge. But the talks may be encountering some snags.
The Associated Press obtained a transcript of the telephone hearing with U.S. District Judge Lewis Kaplan. Boies’ reference to a “grand solution” could involve splitting Wachovia between Wells Fargo and Citigroup.
But a Wall Street Journal story (sub. req.) reports on some problems. Sources told the newspaper that a close examination of Wachovia’s books shows more assets of low quality than had been expected. Also at issue is whether both Citigroup and Wells Fargo would have access to Wachovia’s computer system, or whether Citigroup would get full control.
The banks are seeking a mutual agreement that would avoid a court battle. Citigroup has cited an exclusivity agreement that barred Wachovia from discussing a merger with other potential buyers while its $2.2 billion deal was worked out. Wells Fargo later came in with a $15 billion offer that Citigroup wants to block.
Litigation has been put on hold until Friday at the urging of the Federal Reserve, according AP.
