First Interstate Battle Escalates

The First Interstate Bancorp buyout battle has escalated, with First Bank Systems accusing rival bidder Wells Fargo & Co. of misleading investors, while Wells Fargo plans to make a multibillion-dollar commitment to low-income lending to sweeten its offer.

First Bank and Wells Fargo are both offering stock for Los Angeles-based First Interstate. Wells Fargo’s share price has been slowly rising while First Bank’s stock has stalled. First Bank on Wednesday accused Wells Fargo of scheming to boost its stock price.

Meanwhile, a newspaper said Wells Fargo planned to announce a package of $45 billion in low-income housing, minority and inner-city economic development loans if its bid is favored.

At Wednesday’s share price, Wells Fargo’s offer was worth $1 billion more than First Bank’s offer.