9:25: all hold music sucks compared to the Treasury's choice of 'Stairway to Heaven.'
9:28: Let's make this a group thing. In case you didn't know-- 877-425-9480 (domestic) and (210) 689-8848 (international) with the access code 299254, or live audio webcast at http://www.wellsfargo.com/invest_relations/presents.
9:32: chairman of WFC, Dick Kovacevich,. "This is a very exciting moment in the long history of wells fargo and wachovia"...combining makes a "unique and unparalleled firm."
Apparently WB and WFC share "Strong ethical values of doing what's right."
"Winners are those with the best people." What do you think Citi's feeling right now?
9:34: WB CEO (and goldman alum) Bob Steel is amazing etc etc etc.
9:35: Steel in the hizzous. "THIS DEAL WILL COME AT NO COST TO THE AMERICAN TAX PAYER."
9:36 WFC CEO John Stumpf takes the mic. "A number of factors could cause everything I say today to change." Like another bank swooping in and stealing the deal, or the Patriot Act Bailout Bill not being passed.
This is a whole deal. No child left behind. We're taking the whole damn thing.
Anticipating a capital raise of up to $20 bn in the 4th quarter, primarily common.
SO. MUCH. SYNERGY. #1 commercial banking presence in the West + #1 commercial banking presence in the South East.
9:41 Howard Atkins, WFC CFO takes the mic. "An important part of what's going on today is credit."
Losses are estimated at $74 bn, comprised of credit and rate marks
9:46 $10 bn in transaction costs.
With respect to the balance sheet, synergies, and capital, we expect to exceed the longstanding commitment we've made to the public.
Questions!
Q: Matt O'Connor, UBS: The 74 bn of losses-- that's a pretax number, right?
A: correct.
Q: so you're taking 30 bn up front? approximately?
A: we didn't disclose it, and we don't know.
Q: how are you going to get your ratios higher?
A: the strength of the earnings will get us there....we're expecting run off, etc
Q: how are you going to manage the option on book that WB has?
A: all of the above matt
Q: Nancy Bush from NAB research: expecting to add to WFC's earning's per share yadda yadda...isn't that like 'other than that, how did you like the show, mrs. lincoln?' does it become accretive in your 3rd quarter?
A: yes.
Q: ARE YOU GOING TO HANG BANNERS OUTSIDE ON THE WACHOVIA STORE?
A. we're going to do lots of different things to help welcome them...share ATMs when it's available, make sure people are excited and engaged.
Q: Mike Mayo from Deutsche Bank: [makes a joke about how long it'll take to integrate that i guess was based on a quote WFC said at one point and goes 'so i guess those are your words, right back at ya']
A: indeed, this will not happen quickly...we're convinced with the teams we have, and our experience merging with large organizations that we'll do it right, delivering compelling value to shareholders, communities, etc.
Q: how did you come up with 20 bn of capital that you need? if you same the same marks on your own portfolio that you're taking on wb etc? and is Warren Buffett going to throw you some money?
A: it was a conservative estimate to levels that we feel are appropriate. it was a number we feel is 'doable.' keep in mind the powerful internal rate of capital generation.
Q: and Warren Buffett?
A: it's going to be attractive...warren can speak to it himself.
Q: Chris from Stifel Nicholas: dick- do you plan to stay on longer than the 65 year old retirement age?
A: howard answers--"i've asked dick to stay on...i haven't figured out how to talk to his wife mary jo."
Q: what changed your mind in 5 days to do the deal now
[awkwardly long pause]
A: any deal of this size and complexity is either v. difficult or almost impossible to do in a short time frame...so...as we always do...we don't do any deal that we're not comfortable that the financials will increase shareholder value...it took us the amount of time til today to make sure we got to that place.
Q: Thanks Dick, good luck with that conversation with your wife.
Q: Jason Goldberg from Barclays: i'm going to throw out two headlines--"citi believes it has exclusive rights to wachovia's branch operations" and "fed cautious about wells fargo bid to wachovia"
A: huh?
Q: [reads the headlines again]
A: we think this deal is solid...we're not aware of merger agreements that had been consummated at the time...i don't know about issues that citi has or doesn't have...we're going to see this through to consummation
Q: and that other headline? have you had discussions w/ regulators?
A: yes, we've had discussions...i think the regulators are comfortable with what's going on here
Q: and the 10 percent deposit cap?
A: we believe we don't exceed the ten percent deposit cap...but we're close
Q: John from Stanford Berstein: what determines how much of the 74 bn gets taken at closing and what gets spread out.
A: accounting...looking at portfolios...there are going to be a lot of up front costs...not just accretive, but net losses. "I can't think of anything worse than losing customers because you're trying to get something done in year one or two."
Kovacevish: "I remember, and you're all so young that you don't, that we said it would take us three years to do the Norwest deal...and there was a resounding boo at the New York Plaza....Dick Baker me at Wachovia First Union and asked us how we did it. The old Wells Fargo people won't let us do it faster because they've suffered through the process when you rush it."
Q:David Hilder, Putnam Investments: any thoughts on management structure beyond Dick staying on?
A: it's too early
Q: and the name?
A: I think it's pretty obvious. it's going to be Wells Fargo
Q: Steel-- did WB have a binding agreement w/ Citi and do you owe Citi anything in compensation?
A: these calls are forward looking...but i'm sensing some controversy on this issue.
Q: but you can't speak to a binding agreement w/ citi?
A. NO.
Posted by guest , Oct 03, 2008 9:30AM
Amen Bess...we'll never hear better hold music.
Posted by guest , Oct 03, 2008 9:30AM
Wells Fargo - Hero of the day.
Posted by guest , Oct 03, 2008 9:30AM
"All circuits are busy now. Please try your call again later."
What kind of Mickey Mouse operation are they running there?
Posted by guest , Oct 03, 2008 9:31AM
Lines were full by 20 after. I'm on the net.
Posted by guest , Oct 03, 2008 9:34AM
Odds on Vikram getting on the call and bitching? As he did about BSE cp risk...
Posted by guest , Oct 03, 2008 9:37AM
FUCK! No web access either!
"GOD DAMN IT! JUST BECAUSE WE'RE BEREAVED DOESN'T MEAN WE'RE A BUNCH OF GOD DAMN SAPS!"
Posted by guest , Oct 03, 2008 9:37AM
"Mr Steel, could you please explain the look on Count Vikula's face and his immediate response when you told him you would be 'pulling out'?"
Posted by guest , Oct 03, 2008 9:38AM
I tip my hat to WF for taking on huge risk.
This is a superior deal for WB shareholders.
Posted by guest , Oct 03, 2008 9:40AM
the trading floor at wb just exploded in applause
so fuck u shitigroup
Posted by shalimar , Oct 03, 2008 9:41AM
"THIS DEAL WILL COME AT NO COST TO THE AMERICAN TAX PAYER."
Until we flip the bad assets to Paulson.
"A number of factors could cause everything I say today to change."
If they don't pass the bill.
Posted by guest , Oct 03, 2008 9:42AM
I tip my hat to WF for taking on huge risk.
This is a superior deal for WB shareholders.
Posted by guest , Oct 03, 2008 9:47AM
Did the clown on CNBC really just say that the "'honorable' Barney Frank is about to give the market a huge enema?"
There are two things I didn't need to hear in the same sentence.
Posted by guest , Oct 03, 2008 9:47AM
Didn't Buffet buy a ton of wells Fargo stock recently?
Posted by guest , Oct 03, 2008 9:48AM
@13 O^# is a 9% WFC owner
Posted by guest , Oct 03, 2008 9:48AM
@13 O^3 is a 9% WFC owner
Posted by guest , Oct 03, 2008 9:50AM
Nancy Bush...har har har.
Posted by MarshallStack , Oct 03, 2008 9:52AM
Damn - fat fingers. Had to pick up another liune adn now can't get back on it. Need to learn hand/eye thing.
Posted by shalimar , Oct 03, 2008 9:53AM
Bess ---
Use John's live-blogging app, maybe?
http://www.thestalwart.com/
Posted by guest , Oct 03, 2008 9:53AM
Is there a break-up arrangement with Citi under which WB can do this, or are they daring Citi to try to disrupt a better deal?
Posted by guest , Oct 03, 2008 9:55AM
@ 11 - A "Superior Deal" for shareholders ROFLMAO ... Of course COMPETENT management and BOD would have avoided your shit sandwich buffet ... instead you fucking Crackers ran this bitch off the cliff. Nice call Goober
Posted by guest , Oct 03, 2008 10:07AM
Two words
Crony Capitalism...
Three words
Reneging contracts ( Indians).....
Has this happened before...??
Posted by guest , Oct 03, 2008 10:10AM
From the FDIC - not a done deal it sounds like!
Press Release
FDIC Chairman Sheila Bair Comments on Agreement to Merge by Wells Fargo and Wachovia
FOR IMMEDIATE RELEASE
October 3, 2008
Media Contact:
Andrew Gray
202-898-7192 or angray@fdic.gov
"Since the close of our bidding process, Wells has apparently re-assessed its position and come forth with this new offer that does not require FDIC assistance. It should be emphasized that both the Citigroup proposal as well as the new Wells proposal would stand behind all creditors including depositors, insured and uninsured. Under either proposal, all banking customers of the merged institutions would be fully covered with no disruptions in service.
"The FDIC stands behind its previously announced agreement with Citigroup. The FDIC will be reviewing all proposals and working with the primary regulators of all three institutions to pursue a resolution that serves the public interest."
-- Lurker
Posted by guest , Oct 03, 2008 10:15AM
"9:41 a.m.: Epic fail. We still can't get on the call. Read DealJournal's liveblog instead. Or, for a slightly edgier take, read Bess Levin's liveblog. Our apologies. Our guess is that the call has turned out to be far more popular than Well Fargo anticipated, jamming up all the lines of communication.
9:36 a.m.: Nothing is working.
9:30 a.m.: We're still stymied in our attempt to get on this call. If you are on, please comment below. To be honest, we can't tell if the call is already underway yet.
9:25 a.m.: This is going great so far. The live webcast doesn't seem to be loading properly, the domestic call number brings up a busy signal and the international number says it is no longer in service."
http://www.clusterstock.com/2008/10/live-the-wachovia-wells-fargo-merger-call
Posted by guest , Oct 03, 2008 10:20AM
as long as WFC closes the retarded capital markets division at WB the deal will probably do ok
Posted by guest , Oct 03, 2008 10:23AM
Gasparino reporting Citi suing Wachovia over deal with Wells
Posted by guest , Oct 03, 2008 10:27AM
Citi is not winning this battle. Screw the shareholders, risk the taxpayers, that's gonna go over well.
Posted by guest , Oct 03, 2008 10:29AM
They probably figured they didn't need one, but does anyone know if there was a breakup agreement?
Posted by guest , Oct 03, 2008 10:29AM
trading on WB has been frozen
Posted by guest , Oct 03, 2008 10:29AM
"oops, we should have done a little more homework here."
Posted by guest , Oct 03, 2008 10:30AM
They don't fucking know if they have a deal with Shitty? Wouldn't somebody remember signing a merger agreement?
Posted by guest , Oct 03, 2008 10:31AM
@6
Why is everything such a travesty with you?
Posted by shalimar , Oct 03, 2008 10:32AM
WFC is essentially buying a free call option on the bailout vote tonight.
If the vote fails, WFC backs out, C and FDIC lose - as they've committed to cover the losses.
If the vote passes, WB shareholders take the WFC offer, WFC flips the writedowns to Paulson (note: they don't have to close their books till end of 4Q, which gives them ample time to sell out).
Posted by guest , Oct 03, 2008 10:34AM
Excuse my stupidity, but last time I checked WFC had approx 5% of deposts, not sure what C had, but I'm sure it was more. If this deal puts WFC close to the 10% limit, wouldn't it have put C over? What was WB deposit base? How would they have been able to put the deal through?
Posted by guest , Oct 03, 2008 10:37AM
@33...deposits only in the U.S. - Citi may have had many, many deposits in overseas subs.
Posted by shalimar , Oct 03, 2008 10:41AM
"Wells Fargo's conduct constitutes tortious interference with the Exclusivity Agreement"
Adding another scenario: bill passes, WFC buys/flips, C sues WB, WFC settles.
"Citi has also been providing liquidity support to Wachovia bank since Monday's announcement"
Without which ... ?
Posted by AJ , Oct 03, 2008 10:41AM
@33 WSJ had a graphic on this the other day which I can't find. Citi's US deposit base was actually fairly small pre-Wachovia.
Posted by guest , Oct 03, 2008 10:42AM
@34 - Thanks. I see now. After posting, I found an article stating that the C/WB would have put C at a 9.8% deposit base.
Posted by guest , Oct 03, 2008 10:45AM
@ 36 - Thanks also. I will try to find that.
Posted by guest , Oct 03, 2008 10:49AM
i think wfc at 4%, c at 3% and wb at 7%