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.

Washington Mutual . . . ahem . . . WaMu (NYSE: WM) has just let the other shoe drop, or at least shareholders are hoping that is the case. After yesterday's market close, it announced a $1.6 billion write-down, a reduction in the dividend from 56 cents per share to 15 cents (73%), 2,600 layoffs, downsizing of loan departments, closing of sales offices, closing its broker-dealer business, WaMu Capital Corp., as well as its mortgage banker warehouse lending unit, and more.

It is ironic that Washington Mutual has changed its name to WaMu. Now that it has changed its name, it just needs to leave town as most anyone would do after being disgraced. Seems like in so many respects, that is what it's doing, slinking away. It may very well slink into the arms of an acquisition by a better-managed company like JPMorgan Chase (NYSE: JPM) or Wells Fargo (NYSE: WFC).

I hope I have not jinxed JPM and WFC with my compliments . . . hmm.

Since I have been a shareholder and major supporter of Washington Mutual for many years and have made one of my biggest blunders touting the bank as an investment opportunity, I have my own shame too...although I refrain from running or hiding. The truth will set you free: I made a big mistake!