Citigroup goes to court over Wachovia takeover
In another surprise development in the takeover race for the fourth largest US bank, a New York state court judge has granted an order extending Citigroup's "exclusivity agreement" with Wachovia Corp.business Updated: Oct 05, 2008 15:29 IST
In another surprise development in the takeover race for the fourth largest US bank, a New York state court judge has granted an order extending Citigroup's "exclusivity agreement" with Wachovia Corp.
On September 29, Citigroup announced it would acquire Wachovia for about $2.16 billion, the latest consolidation move under government watch in the ongoing credit crisis.
But on Friday, Wells Fargo elbowed its way into the bidding war and presented Wachovia with a signed and board-approved offer to buy it as an intact company in a stock-for-stock merger that could be carried out without government help.
A statement late Saturday from US banking giant Citigroup said that it was granted emergency injunctive relief extending the exclusivity agreement by the Supreme Court of the State of New York.
The agreement unconditionally bars Wachovia from negotiating or entering into a merger/acquisition agreement with any party other than Citigroup, the statement said. Wachovia and Citigroup representatives were to appear before the Supreme Court October 10.
"Citi has made clear it is prepared to resume negotiating in good faith to complete the transaction contemplated by the agreement-in-principle that Citi and Wachovia announced on September 29," the statement said.
Citigroup CEO Vikram Pandit said, "Any such agreement between Wachovia and Wells Fargo is illegal. We continue to vigorously pursue Citigroup's interest and rights in completing this transaction."
The ongoing financial crisis has impacted Citigroup, whose market value has plunged 38 per cent this year to about $100 billion. If it buys Wachovia, Citigroup would have the third-largest bank network in the country.