The bizarre battle for a troubled bank that started on Friday continues this week. Citigroup, which claims it had an exclusive deal with the FDIC and Wachovia, declared it would sue Wells Fargo, which struck a deal with Wachovia early Friday, but under pressure from the government, both sides agreed to cool off:
Late Monday, federal officials urged the dueling suitors to lay down their legal weapons and attempt a compromise in hopes of avoiding a protracted standoff in court. According to reports, new discussions between the banks and the Fed could lead to a division of Wachovia's assets between the two sparring suitors.
Meanwhile, Reuters is reporting that Wells Fargo may "win" the battle even under the Citi/Wells ceasefire:
Wells Fargo & Co is likely to get about 75 percent to 80 percent of Wachovia Corp's deposits, while Citigroup Inc will likely get closer to 20 percent to 25 percent of the deposits, a person briefed on the matter said on Tuesday.
The situation is in flux and the outcome is still unclear, the person cautioned, adding Wells Fargo may end up with 100 percent of Wachovia's deposits, and Citigroup with none.