Friday, October 03, 2008

Riddle me this Bailout Proponents.

If we're in a credit crunch, a "liquidity crisis," why is it that Wells Fargo wants Wachovia so bad, that it doesn't need FDIC help to acquire it?

CNN Money
- "Citigroup (C, Fortune 500), which offered $2.2 billion for Wachovia's banking operations Monday, demanded that Wachovia and Wells Fargo terminate the proposed transaction. In a statement, Citigroup said the Wells Fargo merger would break an exclusivity agreement it had with Wachovia.

Unlike the Citigroup-Wachovia deal, Wells Fargo (WFC, Fortune 500) intends to absorb all of Wachovia's assets including its vast deposit network, its massive brokerage business and investment management division.

Wachovia shareholders would receive 0.1991 shares of Wells Fargo common stock in exchange for each share of Wachovia common stock in the transaction, valuing the deal at roughly $7 per Wachovia common share, or approximately $15.1 billion."

Did the Federal Government through the FDIC reject a BUYOUT to subsidize a takeover by CitiCorp? Was this done to scare us into the "bailout?"

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