Wachovia Dances With Three Suitors

Friday, 26 Sep 2008 | 7:05 PM ET

You might have heard reports that Wachovia has begun preliminary talks with Citigroup about a potential merger.

Well that's only half the story. We spoke with the New York Times reporter who broke the story and got all the details.

Wachovia Courts Banks
As anxiety builds over the bailout, Wachovia is seeking suitors, with Andrew Ross Sorkin, The New York Times and the Fast Money traders.

"With WaMu going under all eyes were on Wachovia,” reveals NY Times reporter Andrews Ross Sorkin on Fast Money “There’s a nervousness that somehow this bailout might not happen or not happen the way they thought. And if that’s the case they’re really going to have to look for alternatives.”

Meanwhile in breaking news, Dylan Ratigan reveals the Wall Street Journal is reporting that Wachovia is also in talks with Wells Fargo and Banco Santander as potential suitors.

But don't take that to mean they're desperate. Quite the contrary Sorkin tells us Wachovia is merely exploring all it's options if Monday comes and not bailout is on the table.

He thinks Wachovia CEO Robert Steel would "love to be in a good bank / bad bank situation where they get to keep the good stuff and get rid of the bad stuff." (That is currently the core of the bailout proposal at the time of writing.)

On the heels of Washington Mutual the traders can’t help but wonder what a deal would mean for Wachovia shareholders. Specifically, what's the likelihood that equity gets wiped out.

“It doesn’t seem that the Feds are involved,” adds Sorkin. “This is a real deal as opposed to a federally imposed deal."

And Sorkin adds another important point. "I do not want to cause a run on the stock. I think it’s a well capitalized company (exploring alternatives).”

The Bottom Line: These talks are probably a contingency plan if the bailout plan is not in place come Monday.

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Trader disclosure: On Sept. 26, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (MSFT), (WMT); Seymour Owns (AAPL), (EEM), (MER), (MSFT); Seygem Asset Management Owns (VIP); Seygem Asset Management Is Short (RSX); Finerman Owns (GS); Finerman's Firm Owns (MSFT), (MO), (PM), (RAI) ; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM); Terranova Owns (AAPL), (EOG), (FCX), (FTO), (GS), (KOL), (NOV), (POT), (X), (YHOO); Terranova Is Long Mini S&P Futures; Terranova Owns (AIG) And Owns (AIG) Puts; Terranova Owns (MS) And Owns (MS) Puts; Terranova Is Long Crude Oil

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