by bintangkecil on Friday, October 3rd, 2008 | Business, News

Wachovia’s agreement to a transaction with Wells Fargo is in clear breach of an Exclusivity Agreement between Citi and Wachovia. In addition, Wells Fargo’s conduct constitutes tortious interference with the Exclusivity Agreement.

Read the agreement!

The Exclusivity Agreement provides, among other things, that Wachovia will not enter into any transaction with any party other than Citi, and will not participate in any discussions or negotiations with any third party. The Exclusivity Agreement also provides that the parties would be irreparably harmed by any breach of the agreement and that the remedy of specific performance of the agreement is appropriate.

Citi was negotiating in good faith and nearly completed the definitive agreements required to consummate the Citi/Wachovia transaction that was announced on Monday. The value of the Citi agreement to Wachovia shareholders was substantially in excess of Wachovia’s closing price on Thursday, October 2nd. Citi has also been providing liquidity support to Wachovia Bank since Monday’s announcement.

Citi has demanded that Wachovia and Wells Fargo terminate and not proceed with any proposed transaction, any conduct in furtherance thereof, or any other act in violation of the Exclusivity Agreement. Citi has substantial legal rights regarding Wachovia and this transaction.

With or without this transaction, Citi maintains an unmatched, globally dominant franchise with strong liquidity, total deposits exceeding $800 billion and a Tier 1 capital ratio of 8.7% as of the second quarter.

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More from Bloomberg:

Oct. 3 (Bloomberg) — Citigroup Inc. demanded that Wells Fargo & Co. and Wachovia Corp. terminate a $15.1 billion takeover agreement announced today, saying it breached an exclusive deal the New York-based company reached earlier this week.

Citigroup, led by Chief Executive Officer Vikram Pandit, dropped as much as 15 percent in New York trading after San Francisco-based Wells Fargo said it would buy Wachovia in an all- stock transaction. Citigroup announced a $2.16 billion offer for parts of the company four days ago.

“Citi has substantial legal rights regarding Wachovia and this transaction,” the New York-based company said in a statement. “Wachovia’s agreement to a transaction with Wells Fargo is in clear breach of an exclusivity agreement between Citi and Wachovia.”

The Citigroup deal, which included assistance from the Federal Deposit Insurance Corp., would have pushed the New York- based lender to third place among U.S. bank networks, behind Bank of America Corp. and JPMorgan Chase & Co. The proposal didn’t include Wachovia’s brokerage and mutual-fund businesses.

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Related posts:

1. Citigroup sues Wachovia, Wells Fargo for $60 billion
2. Citigroup Hands Victory to Wells Fargo on Wachovia
3. Wells Fargo to Acquire Wachovia for $15.1 Billion
4. Citigroup to Buy Wachovia
5. Citigroup will cut more than 50,000 jobs

Tags: citi wachovia, citi wachovia exclusivity agreement, citigroup wachovia exclusivity agreement, wells fargo wachovia, wells fargo wachovia to terminate