How the battle for Wachovia emerged, and the latest events through 1 p.m. Monday.
THE BANKING BATTLE SO FAR
The battle for Wachovia between Citigroup and Wells Fargo entered the courts over the weekend. By late Monday afternoon, however, the three banks had agreed to a legal ceasefire until noon Wednesday to try to reach an agreement out of court. Here's how the dueling deals emerged, and where they stood as of Monday night:
SUNDAY, SEPT. 14: Bank of America buys brokerage and investment banking giant Merrill Lynch, raising questions about matchmaking of other banks, including Charlotte rival Wachovia.
MONDAY, SEPT. 15: Wachovia CEO Bob Steel tells “Mad Money” host Jim Cramer, “We have a great future as an independent company, but we're a public company, so we're going to do what's right for shareholders.”
WEDNESDAY, SEPT. 17: Reports surface that Wachovia could merge with investment bank Morgan Stanley.
MONDAY, SEPT. 22: Morgan Stanley sells a 20 percent stake in itself to a Japanese bank, ending a possible merger with Wachovia.
FRIDAY, SEPT. 26: Wachovia shares fall 27 percent when the failure of Washington Mutual renews concerns about Wachovia's mortgage portfolio. New York-based Citigroup, San Francisco-based Wells Fargo and Spain's Banco Santander emerge as potential buyers for Wachovia, which experiences a “silent run” on deposits.
SATURDAY AND SUNDAY, SEPT. 27-28: Federal regulators press Wachovia to sell itself, with Citigroup and Wells Fargo the leading candidates to buy the bank.
MONDAY, SEPT. 29: Citi says it plans to buy most of Wachovia for $2.1billion, or about $1 per share, with the federal government taking on some of Wachovia's potential losses. The companies sign an “exclusivity agreement” that forbids Wachovia from pursuing takeovers with other companies, but not a “definitive agreement” finalizing the merger.
FRIDAY Oct. 3: Wells Fargo announces that it has a definitive agreement to buy all of Wachovia for $15.1billion, or about $7 per share. The deal does not require government assistance. Citi demands that Wells and Wachovia terminate the deal, saying it is a breach of its agreement with Wachovia.
SATURDAY, Oct. 4: Citi asks a New York state judge to extend the exclusivity agreement, pending a hearing this Friday. The judge agrees.
SUNDAY, Oct. 5: A busy day in three courts. First, Wachovia asks a federal judge to declare its deal with Wells Fargo valid, and the judge schedules a hearing for todayTuesday. Then a New York state appellate judge overturns the previous day's ruling extending the exclusivity agreement, in part because the ruling was made at the judge's Connecticut beach house instead of within New York State.
In Charlotte, a Mecklenburg Superior Court judge – at the request of two Wachovia shareholders, including former Wachovia CEO Bud Baker – grants a temporary restraining order barring Citi from enforcing its exclusivity agreement and requiring Citi to appear at a Thursday hearing.
Meanwhile, Federal Reserve officials push Citi and Wells to reach a compromise that could carve up the Charlotte bank.
NOON MONDAY: Citi says it has filed a complaint in New York Supreme Court against Wachovia and Wells Fargo seeking more than $60 billion in damages for interfering with its Citi's planned takeover of Wachovia's banking operations.
1 p.m. MONDAY: Sheila Bair, chairman of the Federal Deposit Insurance Corp., tells a crowd at a conference in Washington, D.C., that Wachovia's fate could be decided by the end of the day. “We're all working together to reach an outcome that serves the public interest,” she says, “and I think we will have one today.”
4 p.m. MONDAY: Wachovia, Wells and Citi, in consultation with the Fed, agree to halt litigation tied to the takeover battle through noon Wednesday.
Staff researcher Maria David and staff writer Jefferson George