Wells Fargo Files First Interstate Bid Offer In Hostile Takeover Registered With Sec

Wells Fargo & Co. moved forward with its hostile bid for First Interstate Bancorp on Monday with a government filing that outlines its $10.83 billion offer for the nation’s 14th-largest banking company.

First Interstate has already agreed to a friendly offer from First Bank System Inc., valued at $10.23 billion. Both offers are stock swaps and their values are based on Monday’s trading.

The Securities and Exchange Commission filing, which was expected, states that if First Interstate shareholders reject First Bank System’s offer, First Interstate shareholders could promptly exchange their shares for Wells Fargo shares and a merger could be completed by the end of March 1996.

“For First Interstate shareholders, this filing means that our offer will stand side by side against First Bank System’s offer,” Paul Hazen, chairman of Wells Fargo, said in a statement.

Wells argues its bid is a better deal and plans to push its proposal by presenting it directly to First Interstate’s shareholders and ousting First Interstate’s board, which supports a merger with First Bank.

The Wells offer is for the exchange 0.67 of its shares for each First Interstate share. First Bank System is offering 2.6 of its shares for each First Interstate share.

Either offer would rank as the biggest merger ever, outranking Chemical Banking Corp.’s planned merger with Chase Manhattan Corp.

Wells Fargo said it plans to file materials with the SEC to solicit proxies against the First Bank System merger within the next week.

Monday’s SEC filing contained details that support Wells Fargo’s contention that its offer is a better deal for First Interstate shareholders. Wells Fargo also claims in the document that First Interstate’s chairman said in an Oct. 31 meeting that he’d agree to a merger if Wells Fargo were to raise its offer slightly.

The filing also said that First Interstate’s financial advisors believed that Wells Fargo’s initial offer was fair to the bank’s shareholders.

First Interstate has said its board prefers a merger with First Bank because the deal has more long-term benefits and will lead to fewer layoffs in California.

First Interstate operates nine branches in Spokane County and five in North Idaho. Neither Wells Fargo nor First Bank have operations in the Inland Northwest.

The decision of which offer to take will ultimately be made by First Interstate shareholders.

Wells Fargo’s shares rose $1.12-1/2 to $213.37-1/2 Monday on the New York Stock Exchange. First Interstate’s were up 62-1/2 cents at $135, and First Bank System’s rose 62-1/2 cents to $52.25.