Citibank has announced that it is ending negotiations with Wells Fargo to divide the assets of Wachovia. The announcement was made roughly 15 hours before a litigation standstill agreement among the banks was set to expire.
According to the Wall Street Journal, Citi came to believe that Wells Fargo negotiators would not budge from their $7 a share offer for Wachovia, despite Citi’s conviction that Wachovia’s books were so polluted with bad real estate loans that Wells could not afford that price. Citi broke the news at 5pm on Thursday (9 October) with a press release announcing its decision, which it also faxed to the various judges overseeing pieces of the litigation between the banks. Wachovia and Wells Fargo learned of the decision along with everybody else.
