Updated from 12:27 p.m. EDT
is reportedly considering a merger with
or another bank, a tie-up that, if it occurred, would be the latest chapter in what is already one of the most transformational weeks ever on Wall Street.
The New York Times
reported on the possible Morgan and Wachovia pact after the close of trading Wednesday, citing people who had knowledge of the talks.
Later, the paper reported, again citing people familiar with the matter, that Morgan CEO John Mack told
chief Vikram Pandit that Morgan needed a merger partner. However, the report said, Pandit wasn't interested, and subsequently doubts began to emerge about the statements.
Citigroup on Thursday morning denied the
account of the conversation. "The comments attributed to Mr. Mack in today's
New York Times
regarding Citigroup were never stated by Mr. Mack to Mr. Pandit," Citi said in a statement. Earlier in his career, Pandit spent more than two decades at Morgan.
The paper itself later said because the sources for the comment didn't directly hear the conversation, they couldn't confirm Mack's remarks.
Cramer: When Will This Market Crack?
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said Morgan's talks with Wachovia are indeed taking place and moving toward an advanced stage. At the same time, Morgan is continuing to seek capital from the Chinese government, possibly by selling part of the company to a Chinese bank, the report said.
The network also indicated that Mack has lobbied top officials from the
and the Treasury Department for their approval for a China deal. China's sovereign wealth fund,
China Investment Corporation
, owns 9.9% of Morgan, and
said the fund might try to lift its stake to 49%.
Even so, Morgan is said to be leaning toward working out an arrangement with Wachovia, according to
According to the
report Wednesday, Mack got a call from Wachovia executives asking about merger possibilities. Morgan Stanley and Wachovia representatives, reached after the initial report, had no comment.
Shares of Morgan, which sank to a 52-week low in regular trading during the last session, were recently down 21.3% to $17.11.
Already this week,
has filed for bankruptcy,
has agreed to be acquired by
Bank of America
reached an arrangement for a Fed-led bailout.
With the Chapter 11 of
and the takeover of
, that left
and Morgan Stanley as the lone big U.S. investment banks. However, should Morgan join forces with Wachovia or another firm, Goldman will be the last of the large independent domestic investment banks.
On Tuesday, after both reported their quarterly results,
executives said they didn't need or plan to look for merger partners right now.
is reportedly on the auction block. A separate
report said the lender has hired Goldman to find bidders, which could include
This article was written by a staff member of TheStreet.com.