Wells, Citi extend Wachovia standstill

The rivals agree to hold off on litigation until Friday in their conflict to purchase the ailing bank.

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By Kenneth Musante, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Citigroup and Wells Fargo, the two banks fighting to buy Wachovia, agreed on Wednesday to extend a standstill on legal wrangling over the deal until Friday.

The banks originally announced Monday afternoon that they would halt all legal activities until today. The new agreement expires on Friday at 8 a.m. ET.

Citigroup, Inc. (C, Fortune 500) announced on September 29 that it was taking over Wachovia's (WB, Fortune 500) banking operations for $2.2 billion with backing from the Federal Deposit Insurance Corp.

However, Wells Fargo & Co. (WFC, Fortune 500) threw a wrench in those plans just four days later, offering to buy Wachovia outright for $15.1 billion with no federal assistance whatsoever.

After a weekend of intense litigation, the New York State Supreme Court issued a restraining order on behalf of Citigroup to block a Wells Fargo takeover.

That came after Charlotte, N.C-based Wachovia asked a U.S. District judge to declare the part of the Citigroup deal that would have restricted Wachovia from considering competing bids invalid.

A Wells Fargo victory would transform the bank, whose operations and branches are largely located in the Midwest and on the West Coast, into a dominant presence along the East Coast and in the Southeast.

Analysts say a deal for Citigroup is crucial since it would give the bank access to more deposits. To top of page

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