Wells Fargo & Co. said that it was set to price $10 billion of stock late Thursday to fund the Wachovia Corp. purchase, and that it would likely pare back some of Wachovia's investment banking business.
The San Francisco company had previously said it would raise as much as $20 billion, but that forecast was made before the Treasury Department bought $25 billion of Wells' preferred shares last month as part of the banking industry rescue.
Howard Atkins, Wells' chief financial officer, said on a call Wednesday: "We will look to downsize to a certain extent, essentially looking at the higher-risk, more transactional elements of the investment banking business, commercial real estate, and certainly the residential option adjustable-rate mortgage business."
Purchasing Wachovia would expand Wells' deposit base to the East Coast and make it the biggest U.S. banking company by branches. The deal is set to close next month. Wells said last month that it would raise money on top of the government's commitment, because the Wachovia acquisition would double the size of its bank.