After agreeing to play nice in the battle for Wachovia Corp. (WB)
, Citigroup Inc. (C)
called off its efforts Thursday evening to split Wachovia with rival suitor Wells Fargo & Co. (WFC)
"The dramatic differences in the parties' transaction structures and their views of the risks involved made it impossible to reach a mutually acceptable agreement," Citi said in a statement released Thursday.
Wells Fargo put in an offer for Wachovia just days after officials at the Federal Deposit Insurance Corp.
pushed a deal involving the sale of Wachovia’s banking operations to Citi.
After much bickering between the banks over which suitor would acquire Wachovia’s banking operations, the dispute came to a pause Monday as the banks agreed to suspend courtroom proceedings, and discuss a possible compromise -- that is until Thursday evening, when Citi said no more.
Throughout the debacle, Citi has claimed that its contract granted it exclusive rights to negotiate a merger with Wachovia. As Citi stepped out of the fued, it said it would not seek to prevent a merger between Wachovia and Wells Fargo, but that it had "strong legal claims" against all parties involved for breach of contract and tortious interference.
Sources told HW Monday that the Fed had grown increasingly concerned over the battle for Wachovia given current market conditions and instability. Upon news of Citi's withdrawl, the Federal Reserve said in a statement Thursday that it will "immediately begin consideration of the filings submitted by Wells Fargo for approval to acquire Wachovia."
Disclosure: The author held no relevant positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.
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