Wachovia hunts for a merger partner
Monday, 29 September 2008
NEW YORK, Sept 28 (Reuters): Wachovia Corporation has begun early merger talks with several suitors, according to published reports, all of which spurned Washington Mutual Inc prior to that lender's seizure by the US government.
Wachovia, the sixth-largest US bank by assets, began preliminary talks with Citigroup Inc, the New York Times said on Friday, citing people briefed on the matter.
Meanwhile, the Wall Street Journal said Wachovia has entered preliminary merger talks with Citigroup, Banco Santander SA and Wells Fargo & Company, citing a person familiar with the situation. Bank executives are expected to be in New York this weekend for talks, it said.
Wachovia spokeswoman Christy Phillips-Brown declined to comment on merger discussions. The other banks either declined to comment or were not immediately available.
The market value of Wachovia was about US$21.60 billion as of Friday's market close, Reuters data show. Citigroup's was $109.70 billion, Santander's was $99.80 billion and Wells Fargo's was $123.40 billion, the data show.
Talks would underscore the pressure that Charlotte, North Carolina-based Wachovia, the sixth-largest US bank by assets, has faced from investors, largely because of a $122 billion portfolio of option adjustable-rate mortgages that Chief Executive Robert Steel classifies as "distressed."
The bank suffered a record $9.11 billion loss in the second quarter and some analysts have said it may need more capital after raising $8.05 billion in April.
Wachovia, the sixth-largest US bank by assets, began preliminary talks with Citigroup Inc, the New York Times said on Friday, citing people briefed on the matter.
Meanwhile, the Wall Street Journal said Wachovia has entered preliminary merger talks with Citigroup, Banco Santander SA and Wells Fargo & Company, citing a person familiar with the situation. Bank executives are expected to be in New York this weekend for talks, it said.
Wachovia spokeswoman Christy Phillips-Brown declined to comment on merger discussions. The other banks either declined to comment or were not immediately available.
The market value of Wachovia was about US$21.60 billion as of Friday's market close, Reuters data show. Citigroup's was $109.70 billion, Santander's was $99.80 billion and Wells Fargo's was $123.40 billion, the data show.
Talks would underscore the pressure that Charlotte, North Carolina-based Wachovia, the sixth-largest US bank by assets, has faced from investors, largely because of a $122 billion portfolio of option adjustable-rate mortgages that Chief Executive Robert Steel classifies as "distressed."
The bank suffered a record $9.11 billion loss in the second quarter and some analysts have said it may need more capital after raising $8.05 billion in April.