The most Citigroup can hope for

The three-way tussle for Wachovia right now seems to favor Wells Fargo. Breakingviews notes that the Wells-Wachovia deal is superior in every way to the Citigroup-Wachovia deal. That is painfully obvious to anyone. So as the FDIC, which pushed Citi to bailout Wachovia a week ago, tries to work out a deal, what is the best Vikram Pandit can hope for? It may be a break-up fee, or some portion of the Wachovia empire. But the danger for Pandit is that he's put in the position of defending a deal that will cost taxpayers in the face of a private sector deal that--oh by the way--seems to value the banking assets much more generously. Citigroup's smartest move may be to boost its bid and compete for Wachovia without government assistance. We're about to find out who wants the assets more. The litigation standstill ends Wednesday.

For more:
- here's the Breakingviews article

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