Wells Fargo and Wachovia!
What a week!
Here is what I am thinking:1. Retention package for WS fc's who were updating their resume. Nothing like running back to back forgivable loans at the same time. 2. The name? I am sure we'll have a conference call today where Danny will say they are looking at all options. Probably stay WS for the time being although prior to this I heard AG Edwards was being brought out of moth balls. 3. Recruiters will be burning up the phone lines (caller id is a great thing, my receptionist sees everyone calling in).
i like this better than the Citi deal… That would’ve been a clusterf*ck since they were acquiring us ‘a la carte’ so to speak
True, Trapper. And Citi does not have a good track record of integrating acquisitions. WFC looks better, but there are many details still to come.
citi had no business buying anyone. their in as bad a shape as any other down trodden bank.
Going down again!http://www.nytimes.com/2008/10/04/business/04bank.html?_r=1&hp&oref=slogin
Wells has small brokerage. Wells Fargo Investments. I believe that is they name they would go with if the deal goes through.If the Citi deal goes through I think going back to the respected AG Edwards name should be considered.
Citi can have a temper tantrum all they want, but in the end, shareholders are not going to accept $1 per share when there is a $7 offer on the table.
C is no chumpThey are not going to be bullied out of this deal. They need WB's retail banking network worse than WFC. I expect Citi to put a counter on the table next week. WFC will not want to get into a bidding war. Once this deal is consumated with Citi expect all the WB executives to be terminated immediately aka what Jamie Diamond did to WaMu exec's last week as retribution for being highly disloyal.
How do you get around the fact that no WB shareholder will vote for the C deal unless it is sweetened? C I think is up the creek.
Gordon - i think what Broker Fee is saying is that Citi will ultimately up their offer.
There was an interesting comment in todays NY Times, to the effect that a Wells deal might be better for Wacho shareholders AND taxpayers short term, but long term it may be worse for both. This is based on the question of what happens to C if they dont get those deposits, which they apparently need. Can you freakin imagine? You think we have a mess on our hands now? Watch what happens if Citi blows up!!!
I don’t think C can afford to up their offer. They could be the next bank headed to $10 a share and in need of help.
wsj is reporting citi and Wells are in talks to break up Wachovia into pieces, with Wells getting the brokerage.
and wells getting the southeast and cali branches. Don’t know how receptive wells will be to this deal.
In the frenzied legal activity this weekend over the battle for who will acquire Wachovia, Wachovia sued Citi in federal court claiming that the exclusivity agreement between it and Citi was voided by Section 126(c) of the bailout law. It seems nearly everyone thinks this provision was slipped in at the last minute--either at the behest of Wachovia or Citi or the FDIC, no one is sure. But, once again, nearly everyone is wrong.
Section 126(c) seems aimed at clearing away contractual obstacles to a strong bank acquiring a failing bank. Wachovia argues that the law undoes the exclusivity agreement with Citi. Citi argues that the law undoes Wachovia's merger agreement with Wells Fargo and leaves the exclusivity agreement in place because the CIti deal had FDIC support.
Here's the section:
"(c) UNENFORCEABILITY OF CERTAIN AGREEMENTS.—Section 13(c) of the Federal Deposit Insurance Act (12 U.S.C. 1823(c)) is amended by adding at the end the following new paragraph:
(11) UNENFORCEABILITYOFCERTAINAGREEMENTS.—No provision contained in any existing or future standstill, confidentiality, or other agreement that, directly or indirectly—
(A) affects, restricts, or limits the ability of any person to offer to acquire or acquire,
(B) prohibits any person from offering to acquire or acquiring, or
(C) prohibits any person from using any previously disclosed information in connection with any such offer to acquire or acquisition of, all or part of any insured depository institution, including any liabilities, assets, or interest therein, in connection with any transaction in which the Corporation [FDIC] exercises its authority under section 11 or 13, shall be enforceable against or impose any liability on such person, as such enforcement or liability shall be contrary to public policy."
There’s a lot of debate over what Section 126(c) means—here’s Steven Davidoff’s excellent discussion of the issues—but one thing that shouldn't be under debate is when it appeared in the bill. This section wasn’t a last minute addition to the final draft of the law. It was in the bill rejected by the House on September 29th. Word for word, not one jot changed. Apparently no one noticed it until it was invoked by Wachovia in this deal, but it's easy to overlook these things in hundreds of pages of legal mumbo-jumbo.
Whatever this provision means, it was written long before the Wachovia deal was in place.
if any legacy age fcs have good meetings with rival firms, please share the details!