Well, it appears that Citi has concluded that it will not get Wachovia, though it’s still looking to get some sort of payment for its time and effort.

My guess is that the revalations taht the FDIC was threatening to seize Wachovia if it did not cut a deal with Citi had something to do with their decision to abandon their quest to take over Wachovia:

Early on the morning of Monday, Sept. 29, FDIC officials contacted Wachovia executives and said the bank would not be able to open for business on Monday because of liquidity problems. The FDIC instructed Wachovia to negotiate with Citi, which was the only remaining bidder for Wachovia.

That morning Bob Steel told the company’s board that it had two options: Place Wachovia into bankruptcy or seek a government-assisted deal with Citi and the FDIC. The board voted in favor of seeking a deal.

The deal could be considered coerced, and courts look very dimly on these sorts of shenanigans….Particularly when the competing offer is 7 times more.

Note that even though Wells-Fargo’s offer was much larger, it was still less than 1/10 of what its assets were supposed to be just a year of so back.