Who will acquire Wachovia?

Regulators press for Wachovia sale

Excerpt:

Federal regulators are pressing Wachovia Corp. to sell itself, and Citigroup and Wells Fargo have emerged as the leading candidates to buy the Charlotte bank amid intensifying talks, according to reports late Sunday.

Even as Congress unveiled a bailout plan to help banks offload troubled assets, Federal Reserve and U.S. Treasury Department officials were pushing for a more dramatic solution for Wachovia, the New York Times reported. A sale would mean that an N.C. institution that became a nationwide banking giant by buying up other banks would itself be taken over. That would come as a blow to Charlotte's status as a banking center and pose the possibility of layoffs among the bank's 20,000 employees here.

The possibility of a takeover surfaced Friday as Wachovia's shares plunged 27 percent following the failure of Washington Mutual a day earlier. The Seattle-based savings and loan's demise raised concerns that Wachovia may face bigger losses in its troubled Pick-A-Payment loan portfolio, amid general worries about weaker players in the financial industry. Wachovia officials have stressed the bank has a large and stable deposit base and strong core businesses.

If Citi or Wells Fargo pair with Wachovia, it would create a third financial behemoth to join Charlotte's Bank of America and New York's JPMorgan Chase, which have been taking advantage of troubled financial times by buying weakened rivals. The Times said the bidders are unlikely to offer Wachovia investors more than a few dollars per share, below Friday's $10 closing price. It's possible that Wachovia might be carved up, with the company's large retail bank the main prize eyed by Citigroup and Wells Fargo, the Times said. Wachovia CEO Bob Steel and Wachovia's top dealmaking executive, David Carroll, were leading talks in New York this weekend, the Times reported.

Comment: Should be interesting to see how this unfolds this week!