Merger

Looking at maybe doing a merger arb trade on this deal. Spread is at nearly 18% today, up from about 12%, where it had been for a few weeks.

Anyone have any idea why? Any thoughts on this trade?

Citigroup Inc. is playing like a sore looser.

I’ll sue you if you don’t sell it to me ‘cause you said you would.

Well that may be so, but what would you do if you’re being offered $2.16B for your best assets by Citi and Wells Fargo comes by to offer you $15B for your entire company? There’s talk that Citi is setting up a lawsuit demanding $60B in damages.

I can tell you that if I had a parcel of Wachovia stock I’d be rooting for the Wells Fargo deal. That’s all well and good, but a New York State judge seems to be siding with Citi on this one and has extended the bank’s sole right to negotiate with Wachovia. The two banks appear in court together on October 10th.

So much for the free market.

Click here for related story on Bloomberg.com

http://dealbook.blogs.nytimes.com/2008/10/03/wells-fargo-to-merge-with-w...

Wells Fargo said early Friday that it would merge with Wachovia — including the troubled Charlotte bank’s banking operations — in a $15.1 billion all-stock merger.

The announcement comes only four days after Citigroup agreed to buy Wachovia’s retail banking operations for about $1 a share, at the government’s behest and with its help. That deal would have left Wachovia with only its securities and retail brokerage.

Wells Fargo, based in San Francisco and considered one of the strongest banks amid the market turmoil, said that the deal requires no assistance from the Federal Deposit Insurance Corporation or any other government agency. It will raise up to $20 billion by issuing new shares, primarily common stock.

According to an article on thedeal.com

Thank you Captain Obvious. In other news, the FDA advised consumers not to drink turpentine. Is this really news??? Unbelievable.

Bofa wants to buy Merrill, but Merrill Lynch is a public company. Public shareholders own their stocks. Is Bofa doing a tender offer? What is the mechanism through which BOFA will acquire Merrill Lynch stocks?

I know Bofa is offering an equity premium to the current stock price, but in a hypothetical situation, what if Merrill shareholders don't want to sell? What if everyone wants to hold Merrill until it reaches $100? Can Bofa still acquire Merrill Lynch?

I want the truth!

http://dealbook.blogs.nytimes.com/2008/09/14/bank-of-america-in-talks-to...

Does anybody know where to find Merger models(accretive/dilutive) as well as info on consolidation methods ?
Please PM me if you can send it to me or post a link on this thread !
Thx a lot !