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Astronuc
Staff Emeritus
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2023 Award
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STOCKS TO WATCH
Wells Fargo, Wachovia, Citigroup, AIG
Wells Fargo Nixes Citi’s Wachovia Deal; Futures Bet On Bailout
http://blogs.barrons.com/stockstowatchtoday/2008/10/03/wells-fargo-nixes-citis-wachovia-deal-futures-bet-on-bailout/
Over the weekend, Citigroup got an injunction against Wells Fargo.
Citi gets court order blocking Wells-Wachovia deal
Citigroup said late on Saturday that a New York court issued an order extending its agreement under which it has exclusive rights to negotiate a purchase of Wachovia Corp.
But - Wells Fargo insists Wachovia deal will go forward
Comments follow Citigroup's first legal win in banking battle
Moody's Investors Service lowered the ratings outlook on Wells Fargo & Co. and its subsidiaries, including Wells Fargo Bank, to negative from stable.
Warren Buffett boosts stake in Wells Fargo
http://albuquerque.bizjournals.com/albuquerque/stories/2008/02/18/daily3.html
Kraft just replaced AIG in the Dow (30) Industrials, as of Sept 22, 2008.
Wells Fargo, Wachovia, Citigroup, AIG
Citigroup may consider legal action after it was jilted by Wachovia in favor of Wells Fargo. In a strongly-worded response to the news that Wells Fargo is buying Wachovia, Citi claimed it had exclusive rights and that Wachovia was not permitted to talk to anyone else.
American International Group Inc. plans to refocus on its core property and casualty insurance businesses and look into the sale of other units as it seeks to repay a massive loan from the U.S. Federal Reserve. However, S&P noted that there could be downward pressure on the company's ratings because of the risks around the execution of the plan as well as the heavy debt-service requirements of a much smaller and less-diversified AIG after the sales. "The current disruption in the credit markets could make it difficult to sell businesses at attractive valuations," the ratings agency said.
Wells Fargo Nixes Citi’s Wachovia Deal; Futures Bet On Bailout
http://blogs.barrons.com/stockstowatchtoday/2008/10/03/wells-fargo-nixes-citis-wachovia-deal-futures-bet-on-bailout/
SOMEHOW, WELLS FARGO SEES PROFIT OPS IN WACHOVIA
Warren Buffett is used to shopping in the value aisle. But it’s a little unusual to see him browsing through the trash bin. But Buffett apparently saw some value in the carcass of Wachovia (WB) that wasn’t apparent to banking regulators (wow - imagine hoodwinking government agencies?) and so Wells Fargo (WFC) - the banking titan in which Buffett’s Berkshire Hathaway (BRKA) is the largest shareholder - swooped into steal it out of the government-backed maw of Citigroup (C). For Wells Fargo, it meant that changing its mind - it had crept close to a deal for Wachovia last weekend, only to back out so suddenly that banking regulators had to work furiously to fashion the half-a-loaf asset sale to Citi - saved the bank nearly $5 billion. The $15.1 billion price tag for the entirety of Wachovia is about 25% below the $20 billion that it considered offering just days ago.
Somehow Wells is convinced that it can turn a profit on the transaction in the first year of operation, after backing out the roughly $10 billion it expected to pay in integration and merger costs. Wells has been a tough dog to bet against this year, inasmuch as it can crow about being one of the few major banks to survive the financial services crisis relatively unscathed. Its shares actually have appreciated 17% this year when the average bank stock has declined. Still, Citi had enough concerns about Wachovia’s $312 billion mortgage portfolio, which include a huge chunk of the fragrantly lethal options-ARMs products, that it secured the government’s assurance that taxpayers would absorb anything beyond the first $42 billion in losses. Citi agreed to send the government $12 billion in warrants and preferred shares in return for shouldering the responsibility for what could have been enormous losses. Wells Fargo isn’t asking the government to assume any liabilities in the transaction. And it’s apparently willing to shoulder the roughly $54 billion in Wachovia debt that Citi had to agree to absorb in order to make the deal work. Regulators worried that, if bondholders had been wiped out, the banking system would have suffered widespread repercussions.
Over the weekend, Citigroup got an injunction against Wells Fargo.
Citi gets court order blocking Wells-Wachovia deal
Citigroup said late on Saturday that a New York court issued an order extending its agreement under which it has exclusive rights to negotiate a purchase of Wachovia Corp.
But - Wells Fargo insists Wachovia deal will go forward
Comments follow Citigroup's first legal win in banking battle
NEW YORK (MarketWatch) -- Wells Fargo insisted Sunday that it's takeover agreement with Wachovia will go forward, notwithstanding a court order won by rival Citigroup over the weekend to block the $15 billion transaction.
The battle for Wachovia Corp. intensified after Citigroup said late Saturday that a court order extended its agreement to negotiate a purchase of Wachovia.
. . .
Wells Fargo, Wachovia counter
In a counter statement Sunday, Wells Fargo said that "nothing in the court's temporary order impacts our ability" to ultimately complete a merger with Wachovia.
Wells Fargo said that it has "a firm, binding merger agreement" with Wachovia.
"That agreement represents a transaction that, in stark contrast to Citigroup's proposal, provides significant and certain value to Wachovia shareholders, keeps Wachovia intact, is better for all of Wachovia's stakeholders including its employees and does not demand financial support from our government," Wells Fargo said. "We are confident that we will complete our announced merger with Wachovia."
In a separate statement on Sunday, Wachovia said it "does not believe Justice Ramos's order has any effect on the validity of the Wells Fargo agreement with Wachovia."
Moody's Investors Service lowered the ratings outlook on Wells Fargo & Co. and its subsidiaries, including Wells Fargo Bank, to negative from stable.
Warren Buffett boosts stake in Wells Fargo
http://albuquerque.bizjournals.com/albuquerque/stories/2008/02/18/daily3.html
Warren Buffett, chairman of Berkshire Hathaway, boosted the investment company's sizable stake in Wells Fargo.
Berkshire owned 311.4 million shares of Wells Fargo at the end of 2007, according to documents Berkshire Hathaway (NYSE: BRK-A) filed with the U.S. Securities and Exchange Commission. That's up from the 284.2 million shares of the San Francisco bank (NYSE: WFC) the company owned at the end of the third quarter.
The Omaha billionaire also disclosed for the first time that he's built huge stakes in Kraft and GlaxoSmithKline, according to the SEC filing.
Kraft just replaced AIG in the Dow (30) Industrials, as of Sept 22, 2008.
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