Citigroup Girds for Wachovia Takeover Battle With Wells Fargo

By David Mildenberg and Josh Fineman

Oct. 4 (Bloomberg) -- Citigroup Inc., hobbled by $61 billion of subprime-related losses, now faces its biggest takeover battle in a fight with Wells Fargo & Co. for control of Wachovia Corp.

Citigroup fell as much as 21 percent yesterday in New York trading after Wells Fargo, the biggest U.S. bank on the West Coast, agreed to acquire all of Charlotte, North Carolina-based Wachovia for $15.1 billion. The bid trumped Citigroup's government-backed offer of $2.16 billion for Wachovia's banking operations.

``The taxpayer doesn't pay a penny'' for the Wells Fargo deal, Wells Chairman Richard Kovacevich, 64, said yesterday in an interview. His company's bid is superior to Citigroup's also because it's a higher price and the combining banks ``share similar cultures and values.''

Citigroup Girds for Wachovia Takeover Battle With Wells Fargo....

Wall Street mixed after earnings reports

By JOE BEL BRUNO

NEW YORK (AP) — Wall Street closed out an impressive week with a mixed performance Friday after disappointing high-tech earnings punctured some of investors' enthusiasm over better-than-expected bank earnings reports. But the major indexes still ended the week with big gains, the result of rising optimism about the troubled financial sector.

The market was clearly pleased when Citigroup Inc., while reporting a second-quarter loss Friday morning, beat analysts' forecasts and joined Wells Fargo & Co. and JPMorgan Chase & Co. in delivering stronger results than the market anticipated. But investors who ecstatically sent the Dow Jones industrials soaring by more than 480 points over Wednesday and Thursday were brought back down to earth by results from Google Inc., Microsoft Corp. and Advanced Micro Devices Inc.

Google's results were lower than expected, the result of the weakening economy hurting advertising revenue, while Microsoft missed forecasts by a penny. Also, AMD's chief executive stepped down after the chip maker posted a wider-than-expected loss.

Still, the market that has hungered for good news about financial companies after a year-long credit crisis got it from Citi. The banking company reported a $2.5 billion second-quarter loss due to write-downs tied to deteriorating credit markets. The results surpassed projections, and helped to mitigate some of the market's concerns following a big loss from Merrill Lynch & Co. reported late Thursday.

It was a good sign to some analysts that the market didn't sell off sharply after two straight days of hefty gains.

Wall Street mixed after earnings reports....