Citigroup Snaps Back At Wachovia, Says Deal With Wells Fargo Invalid

New York, NY (AHN) - Citigroup Inc. (NYSE: C) turned furious after Wachovia Corp. (NYSE: WB) dumped it and decided to marry Wells Fargo & Co. (NYSE: WFC) for a price of $15.1 billion in an all- stock transaction.

Now Citigroup has said that it will not let the two firms make a deal as Wachovia will be in a clear breach of an Exclusivity Agreement it reached with the New York-based financial firm early this week.

In addition, San Francisco, Calif.-based Wells Fargo's conduct constitutes tortious interference with the Exclusivity Agreement.

Citigroup was all set to purchase Wachovia's banking operations with additional support from the Federal Deposit Insurance Corp., who also appeared to be taken off guard with early Friday's announcement by Wachovia.

"The Exclusivity Agreement provides, among other things, that Wachovia will not enter into any transaction with any party other than Citi, and will not participate in any discussions or negotiations with any third party," Citigroup said in a statement on Friday.

Defending its stand on the deal with the Charlotte, North Carolina-based Wachovia, Wells Fargo said in a statement that the agreement represents a compelling value for Wachovia shareholders and the bank will not require any financial assistance from the Federal Deposit Insurance Corporation.

"It provides superior value compared to the previous offer to acquire only the banking operations of the company" Wells Fargo Chairman Dick Kovacevich, 64, continued.

"Wachovia shareholders will have a meaningful opportunity to participate in the growth and success of a combined Wachovia-Wells Fargo that will be one of the world's great financial services companies," he added.

Shares of Citigroup plunged by 15 percent on Friday's early trading session. At 1:00pm ET, shares of the firm erased some losses and were trading down by $1.96 or 8.71 percent to $20.54.

At the same time in New York, Wachovia was trading higher by $2.99 or 76.47 percent at $6.90 and Wells Fargo was trading up by $2.64 or 7.51 percent at $37.80.