Prodded by US regulators, Citigroup Inc and Wells Fargo & Co may divide up Wachovia Corp to end a takeover battle that’s disrupting a federal rescue of the ailing North Carolina bank, the Wall Street Journal (WSJ) reported.
Officials from the US Federal Reserve and Treasury are involved in the talks, while executives of Charlotte-based Wachovia have been excluded, the WSJ reported, citing people familiar with the situation.
Citigroup would get Wachovia’s branches in the northeast and mid-Atlantic regions, while Wells Fargo would take the southeast and California, the newspaper reported. Asset-management and brokerage units would go to Wells Fargo.
PHOTO: AFP
BIDS
Citigroup, the biggest US bank by assets, is bidding for Wachovia while trying to rebuild after US$61 billion of losses tied to the collapse of mortgage markets. The bank wants to buy parts of Wachovia for about US$2.16 billion, while Wells Fargo is bidding about US$15 billion for the whole company. Wachovia said Wells Fargo’s bid is better for investors, workers and taxpayers because, unlike Citigroup, it doesn’t rely on government aid.
Under the split being discussed now, neither New York-based Citigroup nor San Francisco-base Wells Fargo would get US financial assistance, the WSJ said.
The two suitors have spent the weekend wrangling in state and federal court over Wachovia, with Citigroup winning a New York state ruling on Saturday that said it had the exclusive right to negotiate a takeover until Friday.
That ruling was overturned on appeal yesterday, leaving the original expiration date yesterday in place.
“We are pleased that the unfounded order entered yesterday has been vacated,” a Wells Fargo statement said. “Wells Fargo will continue working toward the completion of its firm, binding merger agreement with Wachovia.”
TAKEOVER TUSSLE
Separately, US District Judge John Koeltl put off ruling on whether Wells Fargo may proceed with its takeover bid. A hearing is set for today in which another federal judge will be asked to decide the case.
The takeover battle began on Sept. 29 when Citigroup made its bid with backing from the Federal Deposit Insurance Corp to rescue Wachovia from declaring bankruptcy, documents provided by Citigroup showed.
Wells Fargo, which said it was unable to complete a competing bid in time to be considered, returned with its higher offer later in the week, which Wachovia accepted.
Citigroup said this violated a signed agreement not to solicit new offers. New York State Supreme Court Justice Charles Ramos sided with Citigroup, and he extended the exclusive right to negotiate from yesterday to Friday, when he scheduled a hearing on the merits.
FEDERAL CASE
Wachovia took the case to federal court, and at the emergency hearing yesterday, David Boies, a lawyer for Wachovia, asked Koeltl to decide whether language in the US$700 billion federal bailout law for the banking industry enacted last week permits Wells Fargo to make a new bid.
Koeltl said it “appears” Wells Fargo is correct, adding that a judge who is to be permanently assigned to the case this week may reach a different conclusion.
‘PLEASED’
Wachovia spokeswoman Christy Phillips-Brown said the bank was “pleased” that the judge granted its request for a quick resolution, while Citigroup’s Shannon Bell said the company was “very pleased that Wachovia’s motions for emergency injunctive relief and a temporary restraining order were denied.”
ECONOMIC RESILIENCE: Only 11.4 percent of Taiwan’s overseas investments last year were in China, and businesses are dispersing their investments elsewhere, Lai said China’s ambition to annex Taiwan is based on a desire to change the rules-based international order, rather than a desire for territorial gains, President William Lai (賴清德) said in an interview. During an appearance on the talk show The View With Catherine Chang, aired last night, Lai said China aimed to achieve hegemony, and that peace and stability in the Taiwan Strait was an issue of worldwide concern. During the interview, Lai also discussed his “four-pillar plan” for peace and prosperity, which he first outlined in an article published by the Wall Street Journal on July 4 last year. That
‘REGRETTABLE’: TPP lawmaker Vivian Huang said that ‘we will continue to support Chairman Ko and defend his innocence’ as he was transferred to a detention facility The Taipei District Court yesterday ruled that Taiwan People’s Party (TPP) Chairman Ko Wen-je (柯文哲) be detained and held incommunicado over alleged corruption dating to his time as mayor of Taipei. The ruling reversed a decision by the court on Monday morning that Ko be released without bail. After prosecutors on Wednesday appealed the Monday decision, the High Court said that Ko had potentially been “actively involved” in the alleged corruption and ordered the district court to hold a second detention hearing. Ko did not speak to reporters upon his arrival at the district court at about 9:10am yesterday to attend a procedural
Thirty Taiwanese firms, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and ASE Technology Holding Co (日月光投控), yesterday launched a silicon photonics industry alliance, aiming to accelerate the medium’s development and address the energy efficiency of artificial intelligence (AI) devices like data centers. As the world is ushering in a new AI era with tremendous demand for computing power and algorithms, energy consumption is emerging as a critical issue, TSMC vice president of integrated interconnect and packaging business C.K. Hsu (徐國晉) told a media briefing in Taipei. To solve this issue, it is essential to introduce silicon photonics and copackaged optics (CPO)
The High Court yesterday overturned a Taipei District Court decision to release Taiwan People’s Party Chairman Ko Wen-je (柯文哲) and sent the case back to the lower court. The Taipei District Prosecutors’ Office on Saturday questioned Ko amid a probe into alleged corruption involving the Core Pacific City development project during his time as Taipei mayor. Core Pacific City, also known as Living Mall (京華城購物中心), was a shopping mall in Taipei’s Songshan District (松山) that has since been demolished. On Monday, the Taipei District Court granted a second motion by Ko’s attorney to release him without bail, a decision the prosecutors’ office appealed