October 06, 2008

Citi was granted emergency injunction relief extending the exclusivity agreement between it and Wachovia (Charlotte, N.C.) until further notice.

According to a release from Citi, the exclusivity agreement unconditionally bars Wachovia from negotiating or entering into a merger/acquisition agreement with any party other than Citi. The move was promoted by the announcement by Wells Fargo (San Francisco) on Oct. 3 that it intended to acquire Wachovia without FDIC help. Under the judicial order, Citi and Wachovia must appear before the Supreme Court of New York State on Oct. 10.

The New York-based financial giant says it is still prepared to continue negotiating with Wachovia regarding its original FDIC-backed acquisition proposal from Sept. 29.

Reports in The Wall Street Journal indicate that Citi, Wachovia and Wells Fargo met over the weekend to hammer out some kind of compromise. According to the Journal Citi and Wells Fargo would divide Wachovia's more than 3,000 branches by region, with Citi controlling Wachovia's branches in the Northeast and mid-Atlantic and Wells Fargo controlling those in the Southeast and California. The discussions also called for Wells Fargo to buy Wachovia's asset-management and brokerage units.

ABOUT THE AUTHOR