Carolina-based Wachovia might be carved out between two suitors Citigroup and Wells Fargo -- under a solution being pressed by the United States government, a media report said today.
In a sign that US officials are concerned about the increasingly volatile situation, the Wall Street Journal said, officials from the Federal Reserve were pushing hard for Citigroup and Wells Fargo to reach a compromise.
Under the leading plan being discussed on Sunday night, Citigroup and Wells Fargo would divvy up Wachovia's network of 3,346 branches along geographic lines, with Citigroup getting Wachovia's branches in the northeast and mid-Atlantic regions and Wells Fargo taking those in the Southeast and California, the paper said, citing people familiar with the talks.
Wells Fargo would take over Wachovia's asset-management and brokerage units. But unlike Citigroup's original agreement to take over Wachovia, in which the Federal Deposit Insurance Corp agreed to shoulder potentially hundreds of billions of dollars in toxic loans, the plans being discussed Sunday night don't entail either buyer receiving financial assistance from the US government, WSJ said quoting an unidentified person briefed on the talks.
Regulators and bankers, it said, are scrambling to quickly end the drama in part out of concern that if Wachovia remains in limbo when US markets open Monday morning, it could further spook already jittery investors and bank customers.
Hoping to increase the likelihood that an agreement will be reached, Wachovia was excluded from the weekend talks.
