Citigroup gives up quest for Wachovia

CHARLOTTE, N.C., Oct. 9 (UPI) -- Citigroup dropped its bid to acquire Wachovia Corp. late Thursday, clearing the way for a merger between the North Carolina bank and Wells Fargo.

But Citigroup said it plans to pursue a legal claim for $60 million in damages, The New York Times reported. Citigroup agreed to buy Wachovia's banking operations last week for $2.2 billion in a deal brokered by the federal government.

"We stood by while others walked away," Citigroup said. "Now, our shareholders have been unjustly and illegally deprived of the opportunity the transaction created."

The wrangling began when Wells Fargo trumped a $1-per-share purchase offer made by Citigroup with a $7-per-share offer of its own. Wells Fargo upped its offer late Thursday to $15 billion and said it would not need federal aid.

Wachovia had been on the brink of failure because of its heavy investment in bad mortgages. The bank began seeking a merger several weeks ago.

"We look forward to completing our merger with Wells Fargo, which we have always believed is in the best interest of shareholders, employees, creditors and retirees as well as the American taxpayers and it imposes no risk to the FDIC fund," a Wachovia spokeswoman said in a statement.