http://dealbook.blogs.nytimes.com/2008/10/03/well…
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.
“Today’s announcement creates one of the strongest financial firms in the world and is great for all Wachovia constituencies: our shareholders, customers, colleagues and communities,” Robert K. Steel, Wachovia’s chief executive, said in a statement. “This deal enables us to keep Wachovia intact and preserve the value of an integrated company, without government support.”
Under the terms of the deal, Wachovia shareholders will receive .1991 shares of Wells Fargo common stock. Based on Wells Fargo’s Thursday closing price of $35.16 a share, that amounts to $7 a share.
Wells Fargo said that it would incur $10 billion in merger costs.
Is Wells going to try to become like a Citi or JP Morgan now?
Anybody has any idea what the breakup terms of Wachovia & Citi deal are?
Thanks.
Citi is considering taking Wachovia to court. They had an exclusivity agreement, not sure about a break up fee; probably didn't think that was possible given the situation Wachovia was in Friday afternoon.
I wonder what type of role the govt will play in this.
Keep in mind that with Citi's acquisition of Wach, the FDIC was going to place a guarantee on the losses after a certain amount.
WF doesn't require any govt support. With all the flack that the Fed has been taking lately regarding bailouts, you gotta imagine how much they'll be pushing for the WF-Wach combination vs a Citi-Wach combo.
it's a popularity contest! LOL
=== http://bankertimes.com investment banking news
Is there any possibility that Wachovia will hang around long enough to benefit from the bailout plan and avoid a buyout?
The Real Deal on Wells Fargo / Wachovia? (Originally Posted: 10/25/2009)
So I went back searching through previous posts and didn't see anything very up to date on this subject, especially post-Wachovia merger. How do you all feel about this place? What kind of prospects are there for IBD in 5 years maybe... will they ever be up with JPM, Citi, BofA, etc?
Also, how are exit ops? They seem to promote a relatively high amount of analysts to 3rd year or associate. Thanks for any insight.
From talking with a friend who was an analyst at legacy Wachovia, he said that Wachovia was able to compete in the middle market mainly because of their ability to lend their balance sheet fairly freely with respect to Wells Fargo. But now with the merger, there's a big culture clash and struggle between the investment bankers at Wachovia who won deals with the balance sheet and the conservative culture at Wells Fargo. However, times are changing and you never know what will happen in the future.
Seems as if they are focusing on growing their IBD in the near future. Although there will be those integration bigmonkey states, their IBD is clearly outperforming expectations as Wells was actually considering shuttering its Wachovia's old IBD completely just a few months ago.
With that said, I think Wachovia's strength has been in the upper middle-market and it will likely stay that way as Wells did not have a banking culture pre-merger. Exit ops will likely stay similar to those when Wachovia was the brand name.
Is the headquarters in San Fran for all ibanking operations? Does wells have any presence in NY? Do they still use the Wachovia name at all for anything or did everything change to Wells now
I'm pretty sure Charlotte is the headquarters for IBD - they have at least one group in NY (FIG?), and most of the bankers I talked to still had @wachovia as their email.
Charlotte is the headquarters for IBD. Next biggest office is NY, then San Fran. The Wachovia name is still on buildings and used as the e-mail but from a legal point of view, I think it is all Wells now.
Does anybody know the relationship of Eastdil Secured to wells fargo/wachovia with the new merger. Does the general IB/Capital Markets handle the recruiting for this arm? or do they probably hire experienced analyst from within the whole bank?? ...how does Eastdil relate to Wachovia's strong real estate team down in Charlotte??
http://www.eastdil.com/
they have a small group in houston
Personally, I have heard almost the opposite of what bigmonkey said up top. I believe culture wise the two firms were entirely different but it seems to me that legacy Wachovia is loving the more relaxed 'West Coast' style Wells has brought to Charlotte. The IBD HQ is in Charlotte, and they have offices in NY, Chicago, St. Louis, Houston, SF, LA, Atlanta, and Charlotte.
There are definetely a lot of 3rd years and many analyst-to-associate direct promotes. I don't know how this compares to other banks but given my perception via this forum and speaking with other bankers...it seems to be more prevalent at Wells than the rest of the street.
Ir is now Wells Fargo everything (as far as I have seen) with the only exception being Wachovia Capital Partners, although most legacy Wachovia folks still rock the "@wachovia" in their email addresses. Pretty relaxed culture, probably very DISsimilar to NYC based IBs. With that said, they are still a legitimate IB with long hours (group and market dependent) and their analyst work hard.
Seems like they will have a good amount of business in the future however it is anyone's guess as to whether they will escape the stigma of not being based in NYC and how that will ultimately effect their ability to be an unquestioned BB IB firm.
Regards
WFC acquired Barrington Associates, a pretty strong player in the Middle Market a few years ago. I don't know much about how the merger with Wachovia went for the Barrington folks, though.
From what I heard, it went pretty smoothly. WF didn't have much (if any) IB operations prior to acquiring Barrington Associates so I don't know that there was much of a clash to be had. Same for the WF and Wachovia acquisition...they virtually operated on different coasts, so wasn't a lot of clashing. Not to mention there was a lot of speculation as to whether WF would even keep the IB portion of Wachovia so I am sure that was an additional incentive for the legacy Wachovia folks to NOT have a problem with anything their new parent wanted.
Regards
Eastdil recruits separately from the investment bank. They should integrate the platforms, but the Eastdil brand is very strong w/in the industry.
To the OP: I've been with the firm for over 3 years and survived the merger; PM me for specifics.
Does anyone know what the exit opps like now compared to the BB's?
It has a decent enought reputation. Depends on the person at the end of the day.
Too early to tell, but I know several groups are on track to having record revenues this year from analysts working there. I have some friends at other BB's and it seems like a poor year to judge PE/VC/HF hiring on, though I'm sure the upper GS/MS/JPM probably have better luck.
It is relatively new but they are doing very well on leagues (above some BB's like CS/UBS/Barcap/etc.) and are growing very well. I would say exit ops would be better than before the merger and before the Wach guys. I would probably say it's around lower BB status in terms of recruiting.
I know some guys in my interview were going to PE (not megafund) but decent sized as well as to Harvard/Wharton MBA's. Maybe if the market gets better and they keep growing you might see one at a megafund, wouldn't surprise me. Lots of potential for them to keep rising which will solidify them as a BB; another top 8/top10 league showing.
I think both firms are officially going to be under the name Wells Fargo this coming March. That means goodbye @wachovia
Their IBD is doing very well, they need to lose the wachovia name and start fresh.
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