Citigroup has won the first round in a bitter match with Wells Fargo over the takeover of Wachovia after a New York court gave it more time for exclusive negotiations with the sixthlargest US bank.
Citi is also suing Wachovia for up to $60bn in damages, accusing it of breaking an exclusivity agreement when it clinched a rival deal with Wells, according to people close to its case.
However, Justice Charles Ramos of the Supreme Court of the state of New York did not rule on that claim when he granted Citi an emergency extension of the exclusivity agreement on Saturday night.
Yesterday it emerged that hours before Wells trumped its bid for Wachovia on Thursday, Citi had sweetened its offer for the Charlotte-based lender. A deal was close to being signed between Citi and Wachovia but it was scuppered by Wells Fargo's intervention.
People close to the situation said that Citi's increased offer, the details of which are not known, remained on the table.
Citi claimed that prolonging the exclusivity agreement until at least Friday, when both sides are due to appear in court, has frozen merger talks between Wachovia and Wells Fargo.
The San Francisco-based lender trumped Citi's government-aided $2.2bn bid for the banking operations of Wachovia with a $15.1bn all-share offer.
Citi said that the exclusivity agreement, which would have expired on Monday, "unconditionally bars Wachovia from negotiating or entering into a merger/acquisition agreement with any party other than Citi".
People close to Wachovia said the extension of the agreement simply meant it would keep talking to Citi but added that its management still favoured a deal with Wells.
