BUSINESS BRIEFS
Wachovia takes Wells Fargo deal as Citi objects
Associated Press
NEW YORK — A battle broke out yesterday for control of Wachovia, as Wells Fargo agreed to pay $14.8 billion for the struggling bank, while Citigroup and federal regulators insisted that Citi's earlier and lower-priced takeover offer go forward.
The surprise announcement that Wachovia Corp. agreed to be acquired by San Francisco-based Wells Fargo & Co. in the all-stock deal — without government assistance — upended what had appeared to be a carefully examined arrangement and caught regulators off guard.
Wells' original offer totaled about $15.1 billion, but since the value of its shares closed down 60 cents yesterday, the deal is now valued at about $14.8 billion.
Only four days earlier, Citigroup Inc. agreed to pay $2.1 billion for Wachovia's banking operations in a deal that would have the help of the Federal Deposit Insurance Corp.
The head of the FDIC said the agency is standing behind the Citigroup agreement, but that it is reviewing all proposals and will work with the banks' regulators.
EXPORTS BOOST SECTORS' STRENGTH
NEW YORK — Educational services, farms, utilities, stores and hospitals all saw their businesses expand slightly in September, thanks to strong exports and deliveries, a private research group's survey showed yesterday.
The reading of 50.2 from the Institute for Supply Management was down from 50.6 in August. A reading above 50 signals growth. The index has hovered near the 50 "boom-bust" line for most of the year.
INVESTORS STILL WARY OF BAILOUT
NEW YORK — The stranglehold on the credit markets remained tight yesterday after the House approved a revised financial bailout package, with investors nervous that the plan is at most a first step in repairing the faltering U.S. economy.
Anxiety among investors kept Treasury bill demand high; the yield on the 3-month bill slipped below half a percent.
Most market participants have been regarding the rescue plan approved by the Senate earlier this week as a medicine for what's ailing the financial system, but not a cure-all.
AIG TO SELL UNITS FOR LOAN PAYBACK
CHARLOTTE, N.C. — The insurer American International Group Inc. said yesterday it plans to sell off a number of business units to pay off its massive government loan.
The announcement was expected by Wall Street. But it now leaves investors wondering how much AIG will be able to raise from the sales.
AIG, one of the world's biggest insurers, yesterday didn't specifically disclose all the assets it would sell or the expected prices from the sales. However, the New York-based insurer said it plans to retain its U.S. property and casualty and foreign general insurance businesses, and also plans to retain an ownership interest in its foreign life insurance operations.
OIL PRICES WAVER ON MIXED NEWS
HOUSTON — Oil prices slipped in volatile trading yesterday after Congress approved a historic bailout of the nation's teetering financial industry as the longterm health of the global economy remained questionable.
Investors bet down the price for crude early in the day when the U.S. Department of Labor reported that employers slashed payrolls in September by the greatest amount in more than five years, but got back into the market when Wells Fargo Co. stepped in to buy Wachovia Corp. for $14.8 billion.
And few believed that the unprecedented bailout package, passed early in the afternoon, would rekindle the global appetite for energy any time soon.
