Wells Fargo grabs Wachovia; Citigroup out of the picture

Wachovia (NYSE: WB) changed direction early this morning as it left behind an FDIC maneuvered deal with Citigroup (NYSE: C), deciding to hitch up with the Wells Fargo's stagecoach instead. It was announced they have "signed a definitive agreement for the merger of the two companies including all of Wachovia's banking operations."

Wells Fargo (NYSE: WFC) last night presented Wachovia with a signed and board-approved offer to purchase Wachovia Corporation as an intact company and without government assistance in a stock-for-stock merger transaction. Under the Wells Fargo proposal, each share of Wachovia common stock will be exchanged for 0.1991 shares of Wells Fargo common stock, representing a value of $7 per share, based on Wells Fargo's closing stock price on Oct. 2, 2008.

The deal valued at about $15 billion, means Wachovia will combine with the only AAA-rated financial institution in the United States.

IN pre-market activity Wahovia and Wells stocks are up while Citi's is down 10%.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of WFC.