Pressure Intensifies On First Interstate

Stepping up the pressure in its bid to take over First Interstate Bancorp., Wells Fargo & Co. said Monday that it intends to begin buying the bank’s stock to push the deal forward.

Wells Fargo said it will file a notice with the Federal Trade Commission and the Justice Department seeking permission to buy a big chunk of First Interstate’s stock in the open market.

Wells plans to buy up to 4.9 percent, or about $500 million worth, of the Los Angeles-based bank’s shares, a spokeswoman said.

It’s the first step towards a direct takeover offer to First Interstate’s shareholders, said Washington bank lawyer Howard Adler.

“They are escalating the takeover one step further,” said Adler. “They are making tender offer noises.”

San Francisco-based Wells Fargo last week made a $10.1 billion offer for First Interstate, the hostile bid was rare for the banking industry. Wells could seek to buy the bank through a tender offer where shares are solicited directly from shareholders, bypassing First Interstate’s board of directors.

The size of the bid is a record for a bank merger and the combination would create the nation’s sixth-largest bank with $106 billion in assets.

Wells was required to make the filing under a law that requires companies proposing an acquisition to notify antitrust authorities of plans to purchase either 15 million of the voting securities or $15 million worth of the stock.

Banks that want to buy more than 4.9 percent of another company must first get permission from the Federal Reserve.

Wells must wait until 30 days after the filing before it can begin buying First Interstate’s stock.