Wachovia rooting for Wells Fargo buyout despite Citi court block

WASHINGTON, October 6, 2008 (AFP) – Troubled lender Wachovia Corp. appeared determined Sunday to plow ahead with a planned union with Wells Fargo & Co., despite an order from a New York State Supreme Court in favor of jilted suitor Citigroup.

Citigroup was blindsided last week in its bid to complete a tie-up after Wachovia, which originally agreed to a merger with the banking giant, took what it deemed to be a better offer from Wells Fargo.

But in a statement Sunday, the Charlotte, North Carolina-based Wachovia said it does not believe a court order has “any effect on the validity” of a subsequent merger agreement with Wells Fargo.

Wachovia said Sunday that it “continues to believe its agreement with Wells Fargo, which involves no government assistance, is proper and valid.”

The company added that in its view, “the agreement is in the best interests of shareholders, employees, creditors and retirees as well as the American taxpayers.”

After agreeing in principle to a US government-backed deal forged Sunday with Citi, Wachovia reversed course and announced Friday its preference for Wells Fargo.

Citi said a court had granted an injunction late Saturday extending its exclusive rights to negotiate a merger with Wacho