CNBC reported by midafternoon Thursday that the major snag in
the talks is over which bank will take ownership of Wachovia's branches
in the mid-Atlantic region.
The federal government wants the two
would-be acquirers to reach an agreement that would avoid a lawsuit.
Citigroup has suspended its suit against Wells Fargo and Wachovia until
Oct. 10 for violating its merger agreement. Citi is seeking $60 billion
in punitive damages. The suit would likely primarily target Wells Fargo
since Wachovia's market valuation has been declining with this merger
ordeal.
- Gerald MagpilyAlso see:
Dealscape: Breaking: Wachovia ceasefire extended to Friday
The showdown for Wachovia
What's lost in a Wachovia carve-up?
Wachovia Corp. closed down nearly 26% at $3.75 Thursday as suitors Citigroup Inc. and Wells Fargo & Co. negotiated over how they would divvy up the target's assets. 
