Tempers Rise In Bid For First Interstate

First Interstate spurned Wells Fargo’s takeover bid for a second time Monday while the suitor it prefers, First Bank System of Minneapolis, said Wells’ plan to purchase more First Interstate stock would break the law.

The developments escalated a nasty takeover brawl - unusual in the staid banking world - that began a month ago with Wells Fargo’s first bid. First Bank stepped in and crafted a merger deal with First Interstate’s board on Nov. 6.

Los Angeles-based First Interstate had been expected to reject the offer that San Francisco-based Wells sweetened last week.

In a sharply-worded statement, First Interstate said it is determined to move ahead with an agreement to merge with First Bank.

“We believe it is unfortunate that a respected institution like Wells Fargo would jeopardize its reputation by ignoring our board of directors’ carefully considered decision and choosing instead to recklessly pursue its hostile takeover proposal,” said First Interstate chairman and chief executive William E.B. Siart.

“We will not be deterred or distracted from completing our pending merger with First Bank on (shareholders’) behalf.”

Meanwhile, First Bank said Wells Fargo’s plan to purchase up to 5 percent of First Interstate’s stock on the open market would violate federal securities laws.