The move came after JPMorgan Chase's takeover of most of Washington Mutual, the collapsed lender that became the US's biggest bank failure on Thursday, and did little to soothe investor worries over future casualties of the financial crisis.
People close to the situation said that after seeing its shares slumping throughout the day, Wachovia executives, led by its chief executive, Robert Steel, contacted Citi, Wells and Santander – three of the defeated bidders for WaMu. Canada's Toronto Dominion was also interested in WaMu and may take a look at Wachovia, they added. The banks declined to comment.
The approaches came after Wachovia spent recent weeks working on a plan to raise about $20bn in capital from investors including private equity groups and sovereign wealth funds. Wachovia has shifted its focus to finding a buyer as its shares have fallen and the cost of its credit insurance has soared.
People close to some of the potential buyers said it would be difficult for any rival to buy the bank unless the US government helped to clean up a balance sheet saddled with $122bn of distressed assets. By contrast, JPMorgan wrote down the value of WaMu's assets by $31bn.