sweetened bid on Monday, while leaving an impression that the takeover battle is far from over. The Los Angeles-based company reaffirmed its resolve to merge instead with First Bank System Inc. of Minneapolis, saying their combination "will create a dynamic, lower risk, multistate banking alliance that will provide substantial near-term and long-range value." But First Interstate chairman and chief executive officer William E.B. Siart said First Interstate would have been open to a merger with Wells at a price just slightly higher than the sweetened offer the San Francisco- based company is now making. "The record is very, very clear," Mr. Siart said in an interview. "Wells had ample opportunity to achieve its objective." Indeed, documents that First Interstate filed Monday with the Securities and Exchange Commission indicated that Mr. Siart had told Wells chairman Paul Hazen Oct. 31 that Interstate would have been "open to further exploratory discussions" if Wells had offered 0.68 a share. On Oct. 18, Wells had made an unsolicited offer of 0.625 shares for each First Interstate share. Its sweetened offer, made on Nov. 13, a week after the First Bank System merger was announced, is for an exchange ratio of 0.667 shares, valued at $140.987. The First Bank offer is valued at $135.85 per share, based on the agreed exchange ratio of 2.6 shares for each share of First Interstate. The Los Angeles bank's stock closed at $133.75 on Monday, down $1.25. Some analysts said the disclosures indicate that Wells stands a good chance of ultimately winning by coming back with a higher bid. But Campbell K. Chaney, an analyst in San Francisco with the brokerage firm Rodman & Renshaw Inc., criticized Wells for being too parsimonious in its offers. Indeed, Mr. Chaney said he believes from discussions with investors that Wells has to offer at least 0.7 share for each First Interstate share. By not making that high an offer sooner, Wells has increased the cost of concluding a deal, since the First Bank agreement has termination penalties totaling $200 million. "This dickering around by Wells seems to have gone against them," Mr. Chaney said. It appears from the SEC filings that Wells' and First Interstate's biggest shareholders may be the source of the disagreement over price. First Interstate reported that in an Oct. 26 meeting between its senior officials and those of Wells, George Roberts, a principal of the Los Angeles bank's largest shareholder, Kohlberg Kravis Roberts & Co., said a "minimum exchange ratio of 0.70 share of Wells common stock for each share of First Interstate common stock was required in order to make the transaction equitable." Meanwhile, Warren Buffett, chairman and chief executive of Wells' biggest shareholder, Berkshire Hathaway Inc., was reported to have "viewed an exchange ratio of 0.625 as fair to each company's shareholders." In its rejection statement Monday, First Interstate repeated many of its earlier arguments against Wells. The Los Angeles bank said earnings per share and cash flow per share would be greater for First Interstate shareholders in the proposed merger with First Bank System. First Interstate also cited higher dividends in a First Bank merger, lower credit risk and revenue losses, avoidance of $7 billion of goodwill that would come from Wells' use of purchase accounting, and a risk that Wells will not be able to sustain its historically high stock valuation relative to other banks. In related news, Wells announced Friday that it had received the required antitrust clearance under the Hart-Scott-Rodino Act to purchase up to 5% of First Interstate's stock. But First Bank System attacked the Wells announcement, saying in a prepared statement Monday that it "appears to be an effort to create a false sense of momentum for its hostile takeover attempt."

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