Now they all want a Jamie Dimon's type deal: Why buy the entire bank, including the toxic debt and other liabilities as well as having to pony up for the equity, when if you just wait a few days, the Feds may swoop in and let you just cherry pick the good assets, limiting your liabilities? Those thoughts may chill exploratory merger talks between Wachovia and possible suitors Citigroup, Banco Santander, and Wells Fargo . According to Bloomberg:
<p><p><p><p><p>HTML clipboard</p></p></p></p></p> Citigroup Inc., Wells Fargo & Co. and Banco Santander SA are in talks with Wachovia, the Wall Street Journal reported yesterday. They're part of the same group that passed on a chance to buy Washington Mutual Inc., which the U.S. closed two days ago, leaving JPMorgan to buy WaMu for $1.9 billion, a fraction of its previous offer in March.
The bidders may try that tactic again at Charlotte, North Carolina-based Wachovia following its 27 percent plunge in New York trading yesterday, according to analysts at Goldman Sachs Group Inc. and Egan-Jones Ratings Co. They may get help from regulators, who said the U.S. benefited from seizing and selling WaMu because the Federal Deposit Insurance Corp. didn't have to tap its $45 billion insurance fund.
``WaMu's takeover has proven that there's an easy way, if the FDIC is involved,'' said Sean Egan, president of Egan-Jones in Haverford, Pennsylvania. ``You kick the hell out of the equity holders and bondholders. That may be the new model for bank takeovers.''
Wachovia Suitors May Delay Bidding After Dimon's Deal for WaMu - Bloomberg
Was WaMu Takeover Illegal Siezure In JP Morgan's Favor To Protect FDIC?
http://bankimplode.com/viewnews.pl?id=11793
Posted by: Aaron Krowne | September 27, 2008 at 06:38 PM