(more financial chaos and this is not good for Mccain)
http://money.cnn.com/2008/10/05/news/companies/citi_wachovoa/?pCiti: Judge blocks Wachovia-Wells deal
Judge blocks Wachovia-Wells deal
New York State court to hold hearing allowing Citi to press for its previous agreement to buy Wachovia.NEW YORK (CNNMoney.com) -- A New York State judge has temporarily blocked the merger of Wachovia with Wells Fargo, according to a news release by Citigroup - which is trying to buy Wachovia itself.
New York State Supreme Court Justice Charles Ramos issued the order late Saturday, saying that Citigroup and Wachovia must appear before him on Friday, Citigroup said, adding that the order was granted over the objection of Wachovia.
In a deal struck last Monday with the assistance of the Federal Deposit Insurance Corporation (FDIC), Citigroup had offered to take over the Wachovia's banking operations for $2.2 billion. The deal did not include Wachovia's asset-management or retail brokerage units.
But four days later, Wells Fargo said it was buying all of Wachovia for approximately $15.1 billion in stock.
"This deal enables us to keep Wachovia intact and preserve the value of an integrated company," Wachovia CEO Robert Steel said in a statement on Friday.
The battle also has implications for taxpayers.
The Citigroup offer had come with a backstop from the Federal Deposit Insurance Corporation (FDIC), would cover any losses on Wachovia's $300 billion loan portfolio beyond the first $42 billion. The Wells offer does not ask for FDIC assistance.
Wachovia spokeswoman Christy Phillips-Brown said in a statement the company believes its agreement with Wells Fargo is "proper, valid and ... in the best interest of shareholders, employees and the American taxpayers," the Associated Press reported. She said Citigroup is free to make a better offer to Wachovia under that agreement.
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Topic: Judge temporarily blocks Wachovia-Wells Fargo deal (Read 469 times)