Wachovia

~20% of what you currently have

 

How does this compare to the alternative,Citicorp?

 

Yep, that is why I was thinking it would be better for Charlotte.

BTW, great for taxpayers as well which makes me happy. So far, the details indicate no gov't presence in this deal.

 

One other piece that was interesting to me is that since Wells is a SF bank, they would understand the California Real Estate Market better than us here in Charlotte. They may have a better grasp on how to handle all those stupid Pick-A-Payment loans than a Citi would.

 

Maybe. Golden West was a California institution and they made the loans in the first place. Wells is pretty conservative and this merger is outside it's normal operating procedure. It'll be interesting to see how Wells handles the WB option ARM portfolio. Remember, Wells initially pulled out of the WB negotiations because it wasn't comfortable with WB's loan portfolio. Not sure what made Wells change its mind.

 

I would think the drop in price had something to to with it

 

There's probably more to it than that. Drop in price didn't really alleviate all asset quality concerns I would imagine. Wells is conservative by nature and this is a leap for them. Maybe they just decided the risk of not buying WB was greater than the risk of buying WB.

 

Wells is much better for CLT - Charlotte HQ stays intact, investment bankers stay, and Wells is a better run company that matches well with Wachovia culture (slow moving, conservative) so that should help keep more people from bailing.

Wells is much better for WB stock holders, as the price jump demonstrated today. The valuation is higher directly, instead of the crazy unknowns of the Citi deal.

Wells did it partially because they knew it was their best chance to get what they've wanted forever, bigger branch presence in the east and specificaly SE, and WB is the crown jewel of that market. And on Tuesday, the IRS rules around mortgage losses and such changed, so the deal all of a sudden became MUCH more attractive for them.

Citi was forced on WB, Wells and WB is a natural fit. Hopefully there'll end up being some sort of bidding war, there are rumors of a third bank entering the fray (that Spanish bank), but I think this is it. A lot of people got REALLY hosed on monday, but I know some people that went all in Monday-Wednesday and have made a KILLING. I'm just praying for $10/shr .

 

Judge blocks Wells Fargo-Wachovia deal

(CNN) -- A judge has temporarily blocked Wells Fargo's acquisition of Wachovia, according to a news release by Citigroup, which previously had a deal with Wachovia.

Citigroup and Wells Fargo both say they have a deal in place to take over banking giant Wachovia.

New York State Supreme Court Justice Charles Ramos issued the order, saying that Citigroup and Wachovia must appear before him on Friday, the news release said.

Citigroup has been pressing Wachovia and Wells Fargo to abandon their merger plans, arguing that it had entered into an exclusivity agreement with Wachovia.

In a deal struck with the assistance of the Federal Deposit Insurance Corporation (FDIC) on Monday, Citigroup had offered to take over the Charlotte, North Carolina-based bank for $2.2 billion. However, four days later, Wells Fargo said it was buying Wachovia for $14.8 billion.

 

no big surprise there. Wachovia and Wells Fargo had been in discussions for a long time, and the citi agreement prevents NEW stuff only (if Wachovia solicited WF to come bid again, that would be a problem, but if Wells offered a new deal and Wachovia accepted, that was not prohibitied). It won't stand up.