Friday, October 03, 2008

Wells Fargo to Buy All of Wachovia

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In a surprise twist, the West Coast bank Wells Fargo & Company, said Friday that it had reached an agreement to acquire a rival, the Wachovia Corporation, for about $15.1 billion in stock. The announcement came just four days after Citigroup had agreed to buy Wachovia’s banking operations of Wachovia for $2.2 billion of about $1 a share. But Wachovia, which is based in Charlotte, N.C., has now apparently rejected that deal in favor of one where the entire company would be acquired. How Citigroup will respond to the news remained a question Friday morning. In a statement, Wells Fargo, which is based in San Francisco, said that the deal required no assistance from the Federal Deposit Insurance Corporation or any other government agency. The bank plans to raise up to $20 billion by issuing shares, primarily common stock. Under terms of the agreement, which has been approved by directors of each company, Wachovia shareholders will receive 0.1991 shares of Wells Fargo stock in exchange for each share of Wachovia stock. The transaction, based on Wells Fargo’s closing stock price of $35.16 on Thursday, is valued at $7 a share. Wachovia has almost 2.2 billion common shares outstanding. The agreement requires the approval of Wachovia shareholders and regulators. “This deal enables us to keep Wachovia intact and preserve the value of an integrated company, without government support,” Wachovia’s chief executive, Robert K. Steel, said in a statement. “The market presence and composition of our businesses, along with our service-oriented cultures, are extraordinarily complementary and this combination creates great potential for sustained stability and growth.”




Citigroup And Wells Fargo Bidding for Wachovia
... and done, my belief is 70-80% of these option ARMs (the most toxic of all ... But if you are Wells Fargo and you buy Wachovia optionARM-less, handing the risk off to you and me ...
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Retail Survey Report: True Religion, Wachovia Bank, Washington Mutual ...
... Wachovia Bank, Washington Mutual, Wells Fargo, Whole ... for All Mankind Jeans are Horrible, Survey Says, but True Religion Rocks
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Wachovia, JPMorgan, Wells Fargo tumble - Yahoo! News
JPMorgan, Wachovia and Wells Fargo are respectively the ... to "hold" from "buy," while Scott Siefers cut Wells Fargo to "sell" from ... All rights reserved. Republication or ...
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Wachovia, JPMorgan, Wells Fargo tumble: Financial News - Yahoo ...
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Lenders Wells Fargo, Wachovia Curb Mortgage Loans - News - CNBC.com
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Wells Fargo to acquire Wachovia for $15.1 billion
Blogs Columnists Print Edition Readers Rep Corrections All Sections Buy, Sell & More Jobs Cars Real Estate ... SAN FRANCISCO — Wells Fargo says it is acquiring Wachovia in an all-stock transaction worth about $15.1 billion, as Wachovia ends talks ...
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Source: Los Angeles Times
NewsDateTime: 1 hour ago

Wells Fargo Agrees to Buy Wachovia for $15.1 Billion (Update2)
Oct. 3 (Bloomberg) -- Wells Fargo & Co., the biggest U.S. bank on the West Coast, agreed to buy all of Wachovia Corp. for about $15.1 billion in stock, trumping Citigroup Inc.'s offer four days ago for part of the embattled North Carolina lender. The ...
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Source: Bloomberg
NewsDateTime: 45 minutes ago

Wells Fargo To Buy Wachovia for $15 Billion
Wells Fargo ( WFC Quote - Cramer on WFC - Stock Picks ) has reached a definitive agreement to acquire Wachovia ( symbol Quote - Cramer on symbol - Stock Picks ) , including all of Wachovia's banking operations, for $15.1 billion. In a statement ...
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Source: Street.Com
NewsDateTime: 1 hour ago

Wells Fargo to buy Wachovia as House to vote
The latest upheaval in the U.S. banking industry came just four days after Citigroup said it would buy Wachovia, and Wells Fargo said it ... confidence in the financial sector, with inter-bank lending and credit to businesses and private individuals all ...
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Source: International Herald Tribune
NewsDateTime: 24 minutes ago

Wells Fargo to buy Wachovia
Wells Fargo & Co. said Friday that it would purchase Wachovia Corp. in an all stock transaction for US$15.1-billion and issue up to US$20-billion in stock to pay for the transaction. The combined company will have 10,761 retail locations, US$258 ...
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Source: Windsor Star
NewsDateTime: 1 hour ago



Under terms of the agreement, which has been approved by directors of each company, Wachovia shareholders will receive 0.1991 shares of Wells Fargo stock in exchange for each share of Wachovia stock. The transaction, based on Wells Fargo’s closing stock price of $35.16 on Thursday, is valued at $7 a share. Wachovia has almost 2.2 billion common shares outstanding. The agreement requires the approval of Wachovia shareholders and regulators. “This deal enables us to keep Wachovia intact and preserve the value of an integrated company, without government support,” Wachovia’s chief executive, Robert K. Steel, said in a statement. “The market presence and composition of our businesses, along with our service-oriented cultures, are extraordinarily complementary and this combination creates great potential for sustained stability and growth.” The agreement, the chairman of Wells Fargo, Richard M. Kovacevich, said, “provides superior value compared to the previous offer to acquire only the banking operations of the company and because Wachovia shareholders will have a meaningful opportunity to participate in the growth and success of a combined Wachovia-Wells Fargo that will be one of the world’s great financial services companies.” “Wachovia’s brokerage and asset management businesses, which would have been left behind in the prior proposal,” Mr. Kovacevich said, “are tightly interwoven with Wachovia’s core banking business — and this agreement avoids the complexity and unavoidable loss of value in trying to separate them, which would have disrupted Wachovia’s team members and customers.” Under the Citigroup deal, Wachovia would have retained parts of its wealth management businesses, including the Evergreen and Wachovia Securities franchises, and Citigroup would received the banking subsidiaries. In addition, as part of the Citigroup deal, the F.D.I.C. had agreed to guarantee losses above $42 billion in exchange for preferred stock and warrants worth about $12 billion. The deal will further concentrate power within the nation’s banking industry in the hands of a few giant lenders. A sale to Wells Fargo would further concentrate Americans’ bank deposits in the hands of just three banks: Bank of America, JPMorgan Chase and Wells Fargo would control more than 30 percent of the industry’s deposits. Together, those three would be so large that they would dominate the industry, with unrivaled power to set prices for their loans and services. Given their size and reach, the institutions would probably come under greater scrutiny from federal regulators. Some small and midsize banks, already under pressure, might have little choice but to seek suitors. For Wells Fargo, a deal will extend its reach past the Mississippi River, creating a cost-to-coast branch network that will compete with Bank of America and now JPMorgan Chase. It would also give Wells Fargo an important foothold in New York, Florida, and other big markets along the Atlantic Coast, ramping up its ability to sell mortgages, checking accounts, and other consumer loans. On the surface, Wachovia and Wells Fargo, the country’s fourth and fifth largest banks by assets, appear to be almost mirror images of each other. Both were oversized regional banks that never seemed to have national ambitions. Both emphasized consumer banking over lending to big institutional clients. And both had strong sales culture and a focus on nuts-and-bolts operations. Wells and Wachovia have been the subject of merger speculation for years. But Wachovia, like WaMu, has been hobbled by bad mortgages, making a merger more urgent and prompting federal regulators to push for a quick sale. Wachovia’s share price has plunged nearly 74 percent this year. With a big presence along the California coast, Wells Fargo has racked up big losses on mortgages and credit card loans as the housing market has melted down. But it has not been crippled by the bust like many of its big competitors, and maintained relatively strong finances. Wells Fargo kept its lending standards relatively high, even as other big mortgage lenders barreled into California as the housing market boomed. It held many of its loans, rather than packaging and selling them to outside investors. And without a big investment bank, it never suffered the massive write-offs of its big Wall Street rivals. It also bolstered its results with aggressive accounting. Wachovia, by contrast, has been ravaged. Its 2006 purchase of Golden West Financial, a California lender specializing in so-called pay-option mortgages, has proved disastrous. The bank also faces mounting losses on loans made to home builders and commercial real estate developers, and its acquisition of A. G. Edwards, a retail brokerage firm, turned out to be problematic. In June, Wachovia’s board ousted G. Kennedy Thompson, the bank’s longtime chief executive. The talks intensified on Sunday after a weekend of tense negotiations in Washington over a $700 billion rescue for the banking industry. Only days earlier, federal regulators seized and sold the nation’s largest savings and loan, Washington Mutual, in one of a series of important deals that have reshaped the financial landscape. As the credit crisis has deepened, a consolidation in the financial industry that analysts have predicted for years seems to be playing out in a matter of weeks. The impact will be felt on Main Street, Wall Street and in Washington. While the tie-ups may restore confidence in the industry, they also could leave a handful of big lenders to determine fees and interest rates on everything from home mortgages to credit cards to checking accounts. Some small and midsize banks may be unable to compete with these behemoths. But a Wells-Wachovia deal also could shift the center of power in the banking industry further from New York. JPMorgan, which bought Seattle-based WaMu, is based in Manhattan. But Bank of America, which recently acquired Merrill Lynch, is based in Charlotte, N.C. And Wells, which is seeking to buy Charlotte-based Wachovia, is based in San Francisco. In the last two weeks, Wachovia had entered into discussions with several possible suitors. After the collapse of Lehman Brothers, Wachovia held talks with Goldman Sachs and Morgan Stanley and put out inquiries to other banks, according to people close to the situation. Last week, it held discussions with Citigroup, Wells Fargo and Banco Santander of Spain, before the foreign bank’s interested cooled.



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