Citi wins court order in battle for Wachovia

By Dan Wilchins

NEW YORK (Reuters) - Citigroup Inc said it won a court order late on Saturday blocking Wells Fargo & Co. from buying hobbled U.S. bank Wachovia Corp until the court rules otherwise.

Citigroup, which planned to buy Wachovia's banking assets for $2.2 billion (1.1 billion pounds), said New York State Supreme Court Justice Charles Ramos granted an injunction extending Wachovia's agreement to negotiate exclusively with Citigroup.

Citigroup and Wells Fargo are battling for control of sixth-largest U.S. bank Wachovia, which has been hit hard by bad mortgages amid turmoil in global credit markets, but has a large network of branches.

Citigroup, the largest U.S. bank, announced last Monday it had agreed to buy Wachovia's banking operations in a deal backed by the U.S. government. That deal did not include a signed merger agreement, but Wachovia did sign an agreement to only negotiate with Citigroup through Monday, October 6.

On Friday, however, Wells Fargo said it had signed an agreement to buy the whole of Wachovia, including its asset management unit and retail brokerage, for about $15 billion, roughly seven times more.

Wachovia said early on Sunday that it believes its agreement with Wells Fargo is valid and proper, and is best for shareholders, employees and U.S. taxpayers.

"Citigroup is always free to make a superior offer to Wachovia," spokeswoman Christy Phillips-Brown said.

In a statement released later on Sunday, Wells Fargo said it has a binding merger agreement with Wachovia.