CHARLOTTE, N.C. — As SunTrust Banks Inc. contemplates its next move in an uphill struggle to buy Wachovia Corp., executives say they may have to consider drastic measures, including a tender offer.

After standing by almost helplessly last week as Gov. Mike Easley of North Carolina signed a hastily passed bill designed to smooth First Union Corp.’s planned purchase of Wachovia, SunTrust vice chairman James M. Wells 3d said he would not rule out taking a more hostile approach.

“What happens next, tactically, that’s something we’re discussing,” he said in an interview. “A tender offer or exchange, that’s obviously a choice we can make. That’s one of the things in the discussions.”

In a press statement issued late Thursday after the bill was signed, Mr. Wells aimed his criticism of it directly at Wachovia shareholders.

“First Union’s instigation of this unconscionable legislation, and Wachovia’s active support of it, sends a clear message to Wachovia shareholders — you are on your own, your board is not working for you, and the only way to preserve your economic interests is to vote on August 3 to reject the First Union takeover of Wachovia,” he said.

For now, Mr. Wells and other SunTrust officials say, they are focused on trying to persuade Wachovia’s shareholders, particularly large institutional investors, to reject the First Union-Wachovia deal. If they succeed, the Atlanta company wants to negotiate its own deal with Wachovia.

“Our next option is to press our case in anticipation of the Wachovia shareholder vote,” SunTrust spokesman Barry Koling said Friday. “We hope that they say ‘no’ to First Union, and that would send a very strong message to the Wachovia board.”

Both SunTrust and First Union are awaiting regulatory approval for proxy solicitations they plan to mail to Wachovia’s 120,000 shareholders. The mailings are expected to begin within a couple of weeks.

SunTrust also could raise its bid for Wachovia, which might satisfy some investors who think Wachovia is worth more than either First Union or SunTrust has offered. Analysts have said that both bidders could afford to sweeten their offers without biting into earnings, but so far both have ruled it out.

SunTrust is persisting against long odds, analysts said. Hostile takeovers are rare in the banking business, and First Union and Wachovia have already signed an agreement.

A tender offer, in which SunTrust would try to gain control of Wachovia by buying shares directly from shareholders, could rev up the current hostility, which analysts said would make it even more difficult for the Atlanta company to pull off a takeover.

“That is sort of a win-at-all-costs approach,” said Marni Pont O’Doherty, an analyst at Keefe, Bruyette & Woods Inc. in New York who recently wrote a research report on the history of bank takeover battles. “What SunTrust really wants is to merge with Wachovia in a friendly deal.”

Meanwhile, SunTrust is also continuing a legal battle with First Union and Wachovia in a North Carolina Business Court in Greensboro. A judge there is scheduled to hear arguments starting at 2 p.m. today on a request by First Union and Wachovia to dismiss SunTrust’s countersuit against them.

The would-be deal partners have already won a U.S. District Court ruling that kept their suit against SunTrust in a North Carolina state court. The two companies say SunTrust has no grounds to challenge their agreement or its breakup provisions.

On Thursday, Business Court Judge Ben F. Tennille handed SunTrust a small victory by ordering Wachovia to turn over a list of its 120,000 shareholders that had been sought by Theodore J. Hoepner, a SunTrust vice chairman and Wachovia shareholder, so that it could wage its proxy battle.


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