After four days of wrangling with Wells Fargo & Co. over Wachovia Corp., Citigroup Inc. said late Thursday it broke off compromise talks with Wells.
After the markets closed, Citi said it could not reach an agreement with Wells because of the "dramatic differences in the parties' transaction structures, and their views of the risks involved made it impossible to reach a mutually acceptable agreement."
A person briefed on the negotiations said Thursday that trying to fully assess the quality of Wachovia's assets remains a concern for both bidders, and that reaching an agreement on how to divide Wachovia's bank branches held up talks.
A person close to Citi said it still wants any deal to involve a risk-cap agreement similar to the one initially agreed to with the Federal Deposit Insurance Corp. last week.
Wells would not discuss the matter.
Citi announced a plan Sept. 29 to buy Wachovia's banking operation for $2.16 billion and the assumption of $53 billion of debt. The New York company agreed to pay the FDIC $12 billion to shoulder Wachovia loan losses above $42 billion. Four days later, Wells announced that Wachovia had accepted a $15.1 billion all-stock offer for all its operations — an offer that Wells said did not involve FDIC aid.
Citi also said it decided not to try to block a Wells-Wachovia merger.
