NEW YORK — Wachovia, Citigroup and Wells Fargo on Monday agreed to a standstill of all formal litigation activity — a sign that the banks and the Federal Reserve are working feverishly to reach an agreement over the fate of Wachovia.
The standstill agreement will end at noon Wednesday, unless extended.
“We are pleased to participate with the Federal Reserve Board in a fair-minded, good faith process to achieve a prompt and successful outcome,” Citigroup spokesman Michael Hanretta said in an e-mail.
Federal Reserve officials have been in talks with Wells Fargo and Citigroup in the hope of getting the parties to come to some sort of agreement, according to a person with knowledge of the talks. The person spoke on condition of anonymity because of the sensitive nature of the matter.
The Wall Street Journal reported Monday that the discussions could result in the two suitors carving up Wachovia Corp.’s network of 3,346 branches along geographic lines, citing people familiar with the situation.
Early last week, Citigroup agreed to buy Wachovia’s banking assets for $2.1 billion in a deal brokered by the Federal Deposit Insurance Corp.
In a surprising twist, San Francisco bank Wells Fargo announced Friday that it agreed to acquire Wachovia in a deal worth $15.1 billion at the time, or $14.4 billion based on Wells Fargo’s closing price Monday of $33.64. Wells Fargo’s deal did not require any government support.
Wachovia instantly became a major player in Colorado banking when it acquired World Savings in 2006. It is the third-largest bank holding company in Colorado, where it operates 34 branches.
Charlotte, N.C.-based Wa chovia purchased Golden West Financial, owner of World Savings, for $25 billion two years ago in a bid to expand its regional presence.
Analysts and competitors at that time had said that to successfully compete, Wachovia would need to increase the size of its branch network in Colorado and retain existing World Savings customers.
Wachovia barely had a chance to fulfill the mission. It waited more than a year, until last October, to change the old World Savings signage and to raise the profile of the Wachovia name.
Denver Post staff writer Steve Raabe contributed to this report.
