CHARLOTTE, N.C. — As First Union Corp. pitches its proposed purchase of Wachovia Corp. to investors and analysts, it is taking another run at critics who think it is not ready to do another big deal.

First Union executives are on the road this week, trying to convince institutional investors around the country that their company has finally completed the major overhaul it announced a year ago and has managed to cut costs without hurting its ability to grow. These arguments, outlined in yet another slide presentation Wednesday, are calculated to persuade analysts and investors that the company is leaner, tougher, and primed for its marriage with Wachovia of Winston-Salem, N.C.

“We just wanted to add a sense of finality to the restructuring,” First Union treasurer Tom Wurtz said in an interview Wednesday. “We had always intended it to be completed by the second quarter, and we just wanted to confirm to everybody that we’re on track and we’re very productive.”

Mr. Wurtz was in Boston on Wednesday and in New York for two days earlier this week as part of one of the two executive teams criss-crossing the country to sell the Wachovia agreement to institutional investors. Other executives, including chief financial officer Robert Kelly, have been dropping in on investors on the West Coast, in Texas, and in Cleveland. The meetings have included some joint presentations by Wachovia and First Union executives.

Wachovia shareholders are preparing for an Aug. 3 vote on the deal. Institutional investors have been besieged in recent weeks not only by First Union and Wachovia executives but also by their counterparts from Atlanta’s SunTrust Banks Inc., which wants shareholders to reject the First Union deal so it can pursue its unsolicited takeover bid, made May 14.

Wachovia and First Union announced April 16 that they had agreed to a $13.4 billion “merger of equals,” with First Union paying two shares for each Wachovia share. Many Wall Street analysts initially panned the deal, questioning whether First Union had completed the massive restructuring that it said was designed to eliminate the bloat accumulated through years of acquisitions.

Since the restructuring began last June, First Union has taken $2.8 billion of charges; shut down its home equity lender, Money Store; and sold its credit card and mortgage servicing portfolios.

In the presentations First Union offers a checklist of milestones that it says show it has completed the reorganization. Besides the charges, closure, and portfolio sales, the company says it has cut operating expenses by 10% and is on track to save $340 million this year by cutting waste, overlap, and unnecessary expenses.

For example, the company said, it has cut staff expenses 30% in corporate human resources operations and eliminated 90 jobs in fixed-income sales and trading without hurting growth in revenue and profits.

First Union has sold $13 billion of investments and long-term off-balance-sheet contracts, as well as more than $1 billion of distressed commercial loans, and it has reduced its fixed-income trading portfolio by $5 billion.

Mr. Wurtz said the presentations are “intended to simply describe for our investors and Wachovia investors, in a very concise manner, how successful we had been in completing our restructuring and how, as you look at our three business units, we are on a very solid footing.”

However, some analysts remain skeptical. Michael Mayo, an analyst at Prudential Securities, agreed that “when it comes to the major structural events, that part is done.” But he and others say they wish First Union had demonstrated several more quarters of earnings improvements before tying itself up in another big purchase.

“No question, it’s earlier than we would have liked,” Mr. Mayo said. “We’ll look at second-quarter earnings when they come out [next month] to see: Is this just a one- or two-quarter phenomenon, or does this improvement have legs?”

Tom Brown, another veteran banking analyst who has often been harshly critical of First Union, said in a research note this week that he does not think any of the three companies in the merger battle is “anywhere close to firing on all eight cylinders.” Nonetheless, he offered a surprising endorsement of the First Union-Wachovia deal, saying it makes more sense than a marriage of SunTrust and Wachovia.

Mr. Brown, who runs a New York hedge fund and operates the Web site Bankstocks.com, said he likes the First Union deal because it’s a friendly transaction that offers a better mix of businesses than SunTrust could to stimulate grow in the years ahead.

“While I spent much of the past decade and a half criticizing the prices paid by First Union for acquisitions, most of the franchises they acquired were attractive and accentuated First Union’s business mix,” he wrote.

His hedge fund has held positions in all three stocks in the past.

Mr. Mayo said he hopes to help institutional investors decide the case this morning, when he plans to hold a “town hall” conference call. He has organized a panel of experts on the proxy voting process, takeover law, and arbitrage.

“It’s an opportunity for investors to speak their minds … to brainstorm about possible outcomes and hash out the issues,” he said.


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