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Grappling with the subprime mortgage crisis, Wachovia Corp. is now the subject of takeover speculation.
Shares of Charlotte, N.C.-based Wachovia rose 2% to $17.22 early Thursday after the Wall Street Journal reported that word had leaked out that the bank hired Goldman Sachs Group Inc. to advise it, citing unidentified people familiar with the situation.
Wachovia may also be benefiting from another rumor that Warren Buffett is considering an investment in the bank. While there is speculation about a potential deal, Goldman is also advising Wachovia on the search for a permanent successor for CEO Ken Thompson. Thompson was ousted earlier this month in part because of his ill-advised $24 billion purchase of Golden West Financial Corp. in 2006. Wachovia named director Lanty Smith as an interim replacement for Thompson. The Journal reported Smith has told top executives at the bank that Wachovia intends to remain independent, citing the unnamed sources. Instead of an outright sale, the Journal noted that Wachovia may decide to rethink its business model and perhaps get out of investment banking or cut back on its West Coast mortgage operations. -- Donna Block See full story on TheDeal.com See Wall Street Journal story See related: Wachovia board ousts CEO Categories Deal Video
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