Wells Fargo Ups First Interstate Bid

Wells Fargo & Co. raised its hostile bid for First Interstate Bancorp to $10.9 billion Monday, trying an end run around First Interstate’s board by offering to buy stock directly from shareholders.

The San Francisco bank’s moves marked an aggressive pressure tactic directed at its Los Angeles rival, which agreed to a merger with Minneapolis’ First Bank System Inc. on Nov. 6 to escape a hostile marriage with Wells Fargo. Such a merger could lead to thousands of layoffs in California.

First Bank System vowed to proceed with plans to acquire First Interstate, but did not raise its price in response to Wells Fargo’s bid.

Analysts said the next move will be First Interstate’s. The bank could accept the new Wells Fargo deal or put itself up for auction, an option raised by Paul Hazen, chairman of Wells Fargo.