New York (HedgeCo.Net) – The tug of war over Wachovia continued yesterday, as Citigroup and Wells Fargo tried to reach an agreement over the future of the Charlotte-based bank. 

According to transcripts from a teleconference held between U.S. District Judge Lewis Kaplan and the companies, a solution might be in the cards that entails Wachovia being split between Citigroup and Wells Fargo. 

"There are negotiations between Wells Fargo and Citi about a possible grand solution that would preserve the shareholder value for Wachovia as represented by the Wells Fargo deal, but that would involve not a single choice between Citigroup and Wells Fargo," said David Boies, who represents Wachovia.

For now, both Citigroup and Wells Fargo extended a cease-fire that was originally ordered on Monday by Federal Reserve Officials for fears of market retributions. 

Citigroup was believed to have a lock on Wachovia, after their $2.1 billion bid bought them the branch system of the troubled bank.  Though not the best deal for Wachovia, having their assets seized by the FDIC was not a viable alternative.  After they accepted the proposal, Wells Fargo came to the table and offered an astounding $15.1 billion for the entirety of Wachovia, sending Citigroup into a rage and forcing the issue of an exclusivity agreement.

Jane Sherburne, who also represents Wachovia, hopes that they can “facilitate in whatever way we can a negotiated settlement of this matter without escalating the issues in a litigation setting.”

In addition to the acquisation concerns, Citigroup is also going after Wells Fargo, seeking $60 billion in damages for interferring with the deal.  

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com

Tags: brokerages, curbs, due-diligence-service, fullman, gannon, hed, james-mitarotonda, judge-john-koeltl, liquidators, mortgage-backed-bonds, tobias, world-government

BusinessWeek- Citigroup Inc.’s head of hedge fund services is leaving the company, according to an internal company memo.

Steve Bowman has worked at Citi, now the nation’s largest bank by assets, for 24 years in both the New York and London offices.

Friday’s memo from Jamie Forese, co-CEO of markets & banking at Citi, did not say who would replace Bowman. It did say Bowman would help in the coming weeks with the management transition.

Read Complete Article

Tags: board-of-directors, corporate-identity-logo-design, curbs, losses, new-york-mercantile, onshore, world-government

CNNMoney.com – It’s time to say goodbye to Old Lane, the hedge fund management company bought by Citigroup last July.

Citi paid a very dear $800 million to snag the fund and its founder Vikram Pandit, who now runs the entire bank, but the fund’s investors got very little out of the deal. One wonders whether Old Lane was doomed from the moment it was bought, and whether death is the fate of funds that become part of Wall Street conglomerates like Citi (C, Fortune 500), Goldman Sachs (GS, Fortune 500) and UBS (UBS) – the mega-banks that have rolled up merchant bankers, trading floors, and personal wealth management groups.

True, the hedge fund had problems independent of Citi, generating a modest 6.5% in its first year and falling about 6% amid last August’s credit turmoil. It continued to lag other multi-strategy funds thanks to bad credit bets. But problems at Old Lane are the latest in a string of blowups at banks that operate hedge funds. UBS shuttered its Dillon Read Capital Management last May due to big credit losses; and those problems gave markets a warning shot of the credit crisis to come.

The implosion of two highly leveraged credit hedge funds last June was the beginning of the end for Bear Stearns. And Goldman Sachs’ flagship Global Alpha fund began 2007 with $10 billion and ended the year with about $4 billion. Each of these debacles has had its own special flavor, but they all show how hedge funds can lose their mojo when they live within a big, bureaucratic institution.

Read Complete Article

Tags: business-operations, eliot-spitzer, eton-park, exchange-board, raanan-agus, remodeling, rich-individuals, singapore-office, turmoil, world-government