The Hindu Business Line : Court grants Citi extension of exclusivity pact with Wachovia

NEW YORK: The Supreme Court of New York has issued an order extending Citigroup's exclusivity agreement for acquiring Wachovia Corp, a move that will temporarily block Wells Fargo from buying out the troubled bank.

Justice Charles Ramos of the Supreme Court of the State of New York has issued the order. Under the Judicial Order, Citi and Wachovia must appear before Judge Ramos on October 10, Citigroup said in a statement.

Earlier on September 29 regulator FDIC has facilitated Citigroup's acquiring the banking operations of Wachovia, the fourth largest bank of the US. However Wachovia on October 3, announced a new deal entailing its merger with rival Wells Fargo in an all- stock transaction worth about $15.1 billion.

Wachovia had said its amalgamation with Wells Fargo, the only AAA-rated financial institution in the US, would create an entity with the largest deposit base in the country.

Wachovia's board approved Wells Fargo's offer on October 2. Citigroup had said, “Wachovia's agreement to a transaction with Wells Fargo is in clear breach of an Exclusivity Agreement between Citi and Wachovia. In addition, Wells Fargo's conduct constitut es tortious interference with the Exclusivity Agreement”. At the time the Wachovia-Wells Fargo transaction was announced, Citi was finalising the agreements required to consummate its FDIC-assisted open bank transaction with Wachovia.

Citi has been providing liquidity support to Wachovia since the day of the announcement, the statement said. - PTI

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