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Citigroup drops claim over Wachovia buyout
By The Associated Press
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Published: October 10, 2008
Associated Press
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Citigroup has ended its negotiations with Wells Fargo over Wachovia. Shown here is the the exterior of Citigroup offices in San Francisco. AP PHOTO
NEW YORK — Citigroup backed out of negotiations with federal regulators and Wells Fargo in its battle for Wachovia Corp., but vowed to have its day in court.
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Citigroup said it remains willing to complete its original deal with the Charlotte, N.C.-based bank. However, while it is seeking damages for breach of contract, it has decided not to challenge the Wells Fargo-Wachovia deal in court. That stance paves the way for Wells Fargo to close its $11.7 billion stock deal. "We’re pleased Citigroup has abandoned its efforts to interfere with Wachovia’s planned merger with Wells Fargo,” Wachovia spokeswoman Christy Phillips-Brow said.
Claims pursued
New York-based Citigroup said it believes it has strong legal claims against Wachovia and Wells Fargo for breach of contract and plans to pursue its claims "vigorously.”
Citigroup came to the rescue of an ailing Wachovia when it agreed last Monday to buy Wachovia’s banking operations for $2.1 billion in a deal brokered by the Federal Deposit Insurance Corp.
Slammed over the past year by defaulting mortgages, Wachovia agreed to the acquisition "with the understanding that a seizure of its banking assets later that day by the Federal Deposit Insurance Corp. would occur” unless it accepted Citigroup’s offer.
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