Wachovia Bank (fka WB)

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Wachovia-Wells Fargo Deal Contains No Termination Fee >WBFont size: A | A | A6:45 PM ET 10/9/08 | Dow Jones
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4:01 PM ET 10/9/08
Symbol Last % Chg
C 12.93 -10.21%
WB 3.60 -28.85%
WFC 27.25 -14.58%
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DOW JONES NEWSWIRES

Wachovia Corp. (WB) disclosed Thursday in a Securities and Exchange Commission filing that the proposed acquisition of the company by Wells Fargo & Co. (WFC) doesn't contain a termination fee.

According to a copy of the merger agreement attached to the SEC filing, if the merger pact is terminated by either Wachovia or Wells Fargo under certain specified circumstances, the pact "shall forthwith become void and have no effect, and none of Company (Wachovia), Parent (Wells Fargo), any of their respective Subsidiaries or any of the officers or directors of any of them shall have any liability of any nature whatsoever under this agreement."

Also, the pact specifies that neither Wachovia nor Wells Fargo will be relieved or released from any liabilities or damages arising out of its "knowing breach of any provision of the agreement."

On Oct. 3, San Francisco-based Wells Fargo agreed to pay $15.4 billion to buy all of Wachovia, which dashed Citigroup's bid to acquire the Charlotte company's banking operations. Citigroup had struck an agreement Sept. 29 in principle to buy Wachovia's banking operations, but Wells Fargo stepped in on Oct. 2 to buy all of Wachovia. Wachovia's board opted for the Wells Fargo deal, which it says is more favorable for its shareholders.

The three parties then got involved in a legal battle over the two deals to acquire Wachovia and, on Oct. 6, agreed to a litigation standstill agreement that initially was set to expire Oct. 8, but was later extended to Friday, 8 a.m. EDT.

Late Thursday, Citigroup said in a press release that an agreement couldn't be reached with Wells Fargo to give the two banks part of Wachovia. Citigroup also said it wouldn't try to block the merger of Wachovia and Wells Fargo.

Also, Citigroup, which said it remains willing to complete the transaction, said it plans to pursue its legal claims against Wachovia and Wells Fargo for breach of contract and for tortious interference with the contract.