Local News

Moore: State should work to keep Wachovia independent

Posted November 12, 2008

Map Marker  Find News Near Me

— North Carolina should be willing to offer Wachovia Corp. incentives to reject a proposed takeover and remain independent, State Treasurer Richard Moore said Wednesday.

Walls Fargo & Co. last month offered about $13 billion – $7 a share – for Wachovia, which was on the brink of collapse amid the nationwide mortgage crisis. Although the offer is better than a bargain-basement deal Citigroup Inc. put together in September to purchase Wachovia, Moore said it's still inadequate.

"I think the company is worth a lot more," he said, noting Wachovia shares traded at $40 a year ago.

Moore, who oversees the state pension fund that owns 3.2 million Wachovia shares, called on other shareholders to vote against the Wells Fargo deal, which he described as "highway robbery." The Charlotte-based bank would be better off on its own, he said.

"Let's at least make sure we've done everything we can to make sure this company doesn't, in essence, disappear," he said.

Wachovia employs about 20,000 people in Charlotte, 2,000 in the Triangle and about 3,600 in Winston-Salem, where Wachovia was headquartered before its merger with First Union.

By remaining independent, Wachovia might be eligible to apply for funds from the $700 billion government bailout of the financial industry, he said.

When struggling automakers lined up for money from the bailout plan, Moore said, he became angry that Wachovia wasn't thrown a similar lifeline before Citigroup and Wells Fargo swooped in to buy it on the cheap.

"If government is going to start picking winners and losers, how come Wachovia was left in musical chairs without the chair? he said.

Moore said the state should also be willing to step in with its own rescue package in addition to any federal money Wachovia might get.

"Are we all really going to sit so quietly and watch 20,000 jobs in Mecklenburg County alone be put on the chopping block?" he said.

Duke University finance professor Campbell Harvey also said many struggling companies are lining up like children in a candy store for federal bailout money.

"It's a pipe dream to think that the government is going to come in and bail (Wachovia) out once a deal is in place with no government assistance," Harvey said. "Everybody wants to grab some candy right now, but it seems extremely unlikely, given that Wachovia's already gone through two deals."

Moore's idea didn't get much traction Wednesday, as Wachovia shareholders gave Wells Fargo Chief Executive John Stumpf a warm reception in Winston-Salem.

22 Comments

This story is closed for comments.

Oldest First
View all
  • raleigh rebel Nov 13, 2008

    Tell Moore to go back under the rock where he needs to stay and only talk about something he knows about. He wants to get his name out so he can run for some political office.

  • ax2grind Nov 13, 2008

    First, Mr. Moore is trying to cover his own error in having so many shares of Wachovia stock, with the potential cost to the pension fund at tens of millions of dollars...let alone losses from other large stock holdings. Second, with the state government already looking at a huge deficit, how can the state provide any bailout or incentives? He's suggesting NC taxpayers basically pay extra to keep Wachovia in business.

    Hey Mr. Moore, my wife's sole-proprietor business is struggling too. How about giving her some money too? If you can give us about $10 million, she can stay in business, then retire with a nice golden parachute like the Wachovia execs who knowingly put their business debt by billions!

  • babyboomer47 Nov 13, 2008

    Richard Moore is a good man and has done a great job with our state budget. He is a very smart and fair man with good ethics and morals. He would make a great Governor. He loves our state and is looking out for our best interests. I just pray that those who take his place do as well with the state pension as he has done.

  • HUUUH Nov 13, 2008

    The government better get away from its new-found propensity to save every company that's going under. I don't believe the taxpayers want to shore up the capitalist system artificially. Let it do what it does the way it's supposed to!

  • davidgnews Nov 12, 2008

    Let the bail-out sponsored looting begin.

  • Gork Nov 12, 2008

    SHOOT THE WOUNDED OR NONE OF US WILL MAKE IT!

    The $700 billion was authorized by congress to fund a Troubled Assets Relief Program (TARP) - the federal government was to purchase investments that were being devalued because of increasing mortgage default rates. THEY HAVE NOT EVEN BEGUN TO DO THAT. They, instead, are bankrolling sweet deals for their buddies - and peeling off billions in commissions, fees and bonuses, while they build financial mega empires that will provide 8-figure jobs for all of them...

    These are not socialists, these are crooks.

    Let bad businesses fail. That's economic Darwinism - it works.

  • FE Nov 12, 2008

    whatelseisnew - The current plan is a stock swap (no cash).

    "Wachovia shareholders would receive 0.1991 shares of Wells Fargo stock in exchange for each share of Wachovia stock"

    So the lower (or haha higher) that Wells Fargo stock goes, the same essentially applies to Wachovia.

  • hi_i_am_wade Nov 12, 2008

    Let Wells Fargo buy it up. Bank of America will just buy Wells Fargo later and all the unfinished Wachovia buildings in Charlotte will still be owned by a Charlotte company. But first, Bank of America has to buy other banks.

    Richard Moore is concerned Charlotte will stop being the 2nd most important banking town in the US. It won't, because BOA will see to it that BOA gets bigger and bigger and bigger.

  • littlegramma Nov 12, 2008

    Why involve the feds when private money is being used by a healthy bank? Sounds like a typical dem, the bigger and more government the better, screw the taxpayers and help themselves. Leave well enough along, Moore, are you still trying to stay in the spotlite for a future run at the governorship, or higher office? GIve it up...tho we would have prefered you over Perdue, and to have you get bet by McCory!

  • clickclackity2 Nov 12, 2008

    What has Wachovia done to get rid of or punish it's incompetent and greedy executives?

More...