Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Wachovia in talks with suitors: Report

Citigroup, Wells Fargo and Banco Santander all mentioned as possible bidder, New York Times and Wall Street Journal report.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

What will happen if no bailout agreement is reached?
  • Serious economic crisis
  • Wall Street will resolve the matter itself
  • Nothing, the crisis talk is overblown

NEW YORK (CNNMoney.com) -- Wachovia is reportedly mulling a deal with another large bank, including Citigroup and Spain's Banco Santander, according to reports published Friday afternoon.

Citing people familiar with the situation, both the New York Times and the Wall Street Journal reported that the Charlotte, N.C.-based Wachovia was in preliminary talks with Citigroup (C, Fortune 500). The two papers also mentioned Santander (STD) and West Coast banking giant Wells Fargo (WFC, Fortune 500) as other potential suitors.

Spokespeople for Citigroup, Wachovia and Wells Fargo declined to comment. A representative for Santander was not immediately available to comment.

The news, however, failed to prop up Wachovia (WB, Fortune 500) shares in after-hours trading following a particularly tough session in which shares of the Charlotte, N.C.-based bank lost nearly a third of their value.

This isn't the first time that Wachovia was mentioned entering tie-up talks either. A little over a week ago, there was rampant speculation that Morgan Stanley and Wachovia were reportedly discussing a merger.

A deal between the two firms looks increasingly unlikely though after Morgan Stanley (MS, Fortune 500) agreed to sell up to a fifth of the company to Mitsubishi UFJ Financial Group (MUFG), one of Japan's largest banks, earlier this week.

Following a string of high-profile collapse of banks in recent weeks including a bankruptcy by Lehman Brothers and Washington Mutual's (WM, Fortune 500) failure and subsequent purchase by JPMorgan Chase (JPM, Fortune 500) late Thursday, there has been increasing speculation that Wachovia could be the next one to go.

The company reported losses during the past two quarters due in large part to its exposure to U.S. mortgage market.

Some analysts have cited the company's ill-timed 2006 acquisition of the California mortgage lender Golden West Financial Corp. for its current woes.

A Wachovia representative stressed in a statement earlier Friday that it has a "strong retail franchise and large and stable deposit base," adding that it was working to strengthen both its capital and liquidity.

Were Wachovia to enter a deal, it would mark yet another big shake up of the nation's banking industry, which has undergone a dramatic transformation in the past two weeks including Lehman's demise, the acquisition of Merrill Lynch by Bank of America (BAC, Fortune 500) and the government's takeover of AIG (AIG, Fortune 500). To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
The stock market's wild week in 6 pictures It was the wildest week in stocks in recent memory. Here's photos and CNNMoney's tweets of reactions to the panicked selling on Monday and Tuesday, which gave way to a mad buying scramble on Wednesday and Thursday. And then...a selloff on Friday again. More
How New Orleans is learning to live with water After Hurricane Katrina, the city of New Orleans had to reinvent the way it manages water and protects itself from future storms. More
Your degree will earn you the most from these colleges Art majors can make big bucks, too. Find out which school has the highest paid grads in your major. More
Sponsors