Citigroup Inc. and Wells Fargo & Co. agreed to extend a truce in their fight over Wachovia Corp. from noon Wednesday to 8 a.m. Friday.
The two companies are negotiating possible ways to divide Wachovia's bank branches between themselves.
Options include having Citi acquire Wachovia's Northeast and Middle Atlantic branches and having Wells take over its Southeast and West Coast operations, as well as its brokerage business, according to a source briefed on the negotiations.
A source close to Citi said Tuesday that if a compromise is not reached this week, Citi will "aggressively" resume a $60 billion lawsuit against Wells accusing it of violating an "exclusivity agreement" between Citi and Wachovia that Citi says prevented Wachovia from talking with other suitors.
Citi announced Sept. 29 that it would buy Wachovia's branches for $2.16 billion and assume debt of $53 billion. It also agreed to pay the Federal Deposit Insurance Corp. $12 billion to share the risk of expected losses on Wachovia loans. Four days later, Wells announced that Wachovia had accepted Wells' $15 billion all-stock offer for all of its operations, an offer that it said did not involve the FDIC's aid.
