(Recasts; adds analyst comments, share movement)
Oct 3 (Reuters) - Credit Suisse widened its 2008 loss estimate on Citigroup (C.N) after Wells Fargo & Co (WFC.N) agreed to buy Wachovia Corp WB.N for more than $16 billion, besting a U.S government-backed Citigroup bid.
The loss of the acquisition is both a strategic and financial setback for Citi, analyst Susan Katzke said.
She removed the expected earnings addition from her estimates, assuming no acquisition and no near-term common equity offering.
She widened her 2008 loss estimate on Citi by 5 cents to $1.60 a share. For 2009, she expects Citi to earn $1.75 a share, compared with her prior estimate of $1.90 a share.
If Citi’s bid had been successful, the company would have acquired a prized retail banking franchise in terms of footprint, deposit base and technology infrastructure, Katzke said. Citi was also set to receive loss protection from the Federal Deposit Insurance Corp.
The acquisition could have upgraded existing consumer bank integration and infrastructure, but now Citi may have to return to its prior domestic consumer banking strategy, Katzke said.
Shares of Citi fell more than 14 percent to $19.20 in morning trade Friday on the New York Stock Exchange. (Reporting by Amiteshwar Singh in Bangalore; Editing by Pratish Narayanan)