Wells Fargo Agrees to Buy all of Wachovia for about $15.1 billion in stock, keeping Wachovia intact and needing no U.S. assistance. Citigroup offered to buy Wachovia’s Banking operation for $2.16 billion, which would relied on financial backing from the FDIC and leave behind the A.G. Edwards Inc. brokerage and the Evergreen mutual-fund family.
.
.
What does this mean for Wells Fargo and Wachovia share holders?
Wachovia shareholders get 0.1991 shares of Wells Fargo common stock for each share they own. Wells Fargo expects charges related to the acquisition of about $10 billion, and the company said it will issue as much as $20 billion of new securities, mostly common stock.
What happens to a company’s stock if they are bought out?
This deal values Wachovia at $7 a share. You can expect that the price of Wachovia stock to jump to at least that. My guess is that Wachovia, and Wells Fargo shares will go up in value with Wachovia’s in a steeper climb.
What do you think?
Source: bloomberg – Wells Fargo Agrees to Buy Wachovia for $15.1 Billion
October 3rd, 2008 at 2:53 pm
It will be interesting to see the course of action for Citigroup now. It is assumed that they will file suit regarding the exclusivity agreement they had with Wachovia, but if they win that or lose that, will they bid higher than Wells Fargo? The passed bailout plan could give an added benefit to any buyer of a financial company with bad loans such as Wachovia.
October 3rd, 2008 at 3:19 pm
I think that everyone was waiting for Wells Fargo to make a move and they did. In my mind the primary reason for Wells Fargo to buy Wachovia is to get more exposure to the East cost. I think they realized that if they don’t make a move then they would be completely locked out of the East cost by Bank of America, JP and Citi. Getting this deal done make a lot more sense for Wells Fargo then Citi, considering that Citi just went through a very messy restructuring a few quarters ago. I do agree that it will be very interesting to see what happens with the bailout plan passing.
October 6th, 2008 at 11:32 am
New update
Citigroup, Wells Fight May End by Splitting Wachovia
http://www.bloomberg.com/apps/news?pid=20601103&sid=a89qi6HAfunY&refer=news
October 6th, 2008 at 1:53 pm
It’s getting rather ugly
http://www.bloomberg.com/apps/news?pid=20601087&sid=aGFtOPHaJke8&refer=home
Citigroup Sues Wachovia, Wells Fargo Over Takeover (Update2)
By David Glovin and Patricia Hurtado
Oct. 6 (Bloomberg) — Citigroup Inc. sued Wells Fargo & Co. and its takeover target Wachovia Corp. for $60 billion, claiming their agreement violates its rights to buy a portion of the Charlotte, North Carolina-based lender under a previous deal.
Citigroup is seeking more than $20 billion in compensatory damages and $40 billion in punitive damages from the banks, their officers and directors, according to a complaint filed today in New York State Supreme Court in Manhattan.
July 25th, 2010 at 5:02 am
I’m very happy that I found your website, it had all of the information i was looking for
April 10th, 2011 at 3:54 am
Bedinger Drug Testing http://www.microdynamic.org/ – buy clonazepam Klonopin is a well liked medication because it has a very low toxicity, a short half life, and doesn?t need time to build up in the body before it comes fully effective. klonopin price