Citi never consummated the deal!

How the West Coasties beat the Citi

Excerpt:

But here's the problem: Citigroup didn't follow the lead of J.P. Morgan Chase & Co. and force the deal's immediate consummation, as J.P. Morgan had done with Washington Mutual Inc. This was, in part, because Wachovia was in better shape, but also because panicked regulators wanted to stress that Wachovia had not failed.

By banking standards, it didn't. By confidence standards, Wachovia had one foot in the grave.

That was probably the reason Citigroup and Wachovia never signed an agreement that included a break-up fee, standard in any corporate merger contract. Who would break up a rescue?

Wells Fargo would, it turns out, with a couple of conditions. First, that the Internal Revenue Service relax its limits on how much a bank could write off its tax bill if it bought another troubled bank. That came Tuesday. Then Congress neared a deal to pass the Troubled Asset Relief Plan.

...

All of this is a humiliation of Pandit, whose reputation was built on the savvy he exhibited as an investment banker at Morgan Stanley, and who sold his hedge fund to Citigroup for $800 million and ascended to the top job there a year later.

Citigroup officials were livid Thursday night when Wachovia representatives called to give them the bad news. But what can they do? Citigroup can't top the bid. They may sue, but what court is going to force a deal that puts a burden on the FDIC and forces shareholders to accept almost nothing?

Comment: Like I said ... a lot of buzz at the office today!