The 4,800 St. Louis employees of Wachovia Securities have been reduced to helpless onlookers as two financial titans — Citigroup Inc. and Wells Fargo & Co. — battle to acquire the securities firm’s parent company, Wachovia Corp.
Wells Fargo seemed to get the upper hand late Thursday afternoon, as Citigroup broke off negotiations on a compromise. Citigroup said it would sue for damages, claiming that Wells Fargo improperly interfered in its contract to buy Wachovia, struck 11 days ago. But Citigroup also said it would not seek a court order blocking Wachovia from accepting a much higher bid from Wells Fargo.
The upshot of all this: There is a reasonably good chance that a major brokerage headquarters and a lot of jobs will remain at the corner of Jefferson Avenue and Market Street in St. Louis, where the homegrown A.G. Edwards & Sons stood until it was bought by Wachovia a year ago.

Citigroup said it still is willing to go through with the original deal, but it only wants Wachovia’s banking operations. That would mean the securities operation could end up as an independent company, possibly with some smaller divisions of Wachovia Corp. attached.
San Francisco-based Wells Fargo, on the other hand, has offered to buy all of Wachovia and locate its securities group headquarters in St. Louis. Any promise must be viewed with skepticism, especially given the current chaos in financial markets, but such a decision would make sense.
“They’d have to go to great trouble to run it from anywhere else,” said Ben Edwards, the former A.G. Edwards CEO whose family founded the firm. “The people and the infrastructure are already here,” he told us Thursday, and Wells Fargo’s own securities business is a small fraction of the size of Wachovia’s. Mr. Edwards thinks St. Louis employees probably would be better off if Wells Fargo ends up owning Wachovia.
Of course, this drama still is playing out. Wachovia Securities also could be sold to another financial firm with headquarters elsewhere. Or there could be no merger at all, leaving Wachovia Securities shackled to a bank in government receivership.

The Federal Deposit Insurance Corp. started this drama late last month when it threatened to seize the failing Wachovia bank, forcing it to deal with Citigroup. To get Citigroup aboard, the FDIC offered to cover some of Wachovia’s many bad loans. But four days later, Wells Fargo jumped into the picture with an offer to pay much more than Citigroup is offering — with no FDIC guarantee required.
That seemed like a hopeful sign for a banking industry on the verge of panic. But on Thursday, the Wall Street Journal reported that Citigroup and Wells Fargo executives have been poking through Wachovia’s books and finding that its assets are worth less than expected. Thursday’s stock market tumble — the Dow Jones Industrial average dropped 679 points, more than 7 percent — surely didn’t ease any concerns.

Meanwhile, the employees at Jefferson and Market are left to worry. Many of them survived Wachovia’s takeover of A.G. Edwards. Now, having made a difficult transition to a new corporate culture, they may find themselves adjusting to a different parent barely a year later.
They won’t be alone. The Bureau of Labor Statistics counts 81,000 people employed in financial services in the St. Louis metropolitan region. As the stock market tanks and banks teeter, more of those jobs will be on the line.
What seems all but certain is that the name on the downtown St. Louis complex of buildings will change; Wachovia has become a tainted brand name. “Brokers don’t want to get calls every day with people saying, ‘Is my money safe with your company?’” Mr. Edwards said.
Maybe those old A.G. Edwards signs are still in storage.