Wachovia–The day after
Well, a day later, and at least the sky did not fall. As news continues to filter out, the Wachovia deal is looking muddier, at least to me. First off, now that the intial shock has worn off, news reports now frame it as Wachovia Corp selling a large portion of its assets, including all those troubled loans (damn you, Golden West and California!), to Citigroup. Wachovia Corp will remain a public entity, albeit much smaller, if the deal goes through (and if someone else--you know, all those other banks flush with cash--doesn't buy the rest of it).
The Wall Street Journal is reporting that Wells Fargo came close to buying the assets at a share price in the teens. Citi paid about a buck. The thing is, shareholders still have to approve this Citi deal. If an offer was close in coming for the teens, it stands to reason shareholders might not approve a deal for a buck a share. Especially is this federal bailout passes, making available billions of dollars to shore up troubled loans. This story is not over.