Banks and thrifts from around the country are expected to meet today's noon deadline to submit bids for the 61 branches Wells Fargo & Co. must divest as part of its $12 billion purchase of First Interstate Bancorp.

Offers are expected from leading California players such as Union Bank, the Bank of Tokyo subsidiary, and Great Western Financial Corp.

Out-of-state banks with a toehold in California, including Comerica Inc. and U.S. Bancorp, are also expected to make strong bids. At least one consortium of community banks is also set to make a play, according to sources familiar with the situation.

Wells is expected to garner $200 million from the sales, assuming an average 8% deposit premium is paid.

In addition, there are rumblings that large out-of-state banks with no California presence may try to pick up branches to make an entry into the state. Norwest Corp., Banc One Corp., and even NationsBank Corp. are considered possible buyers, as are the Seattle-based thrift Washington Mutual Inc. and First Hawaiian Inc.

Wells' branch divestiture has bankers throughout the West buzzing with excitement over what may be a unique opportunity to increase market share in the Golden State.

"We're very interested to see what happens and its impact on the competitive situation in California," said a West Coast banker who has reviewed the package for sale and who asked not to be named.

When the Justice Department announced late last month that it would require Wells to divest 61 branches, with $2.54 billion of deposits, plus associated loans, it ranked as the third-largest divestiture in banking history.

But the deal will be the largest divestiture ever in California. BankAmerica Corp. had to divest $2 billion of deposits with 45 California branches in its 1992 acquisition of Security Pacific Corp.

The investment bank Montgomery Securities is overseeing the Wells branch sales. Sources familiar with the bidding say the following process has been adopted:

Initial bids are due by noon today, Pacific time, at Montgomery's San Francisco office. An initial cut will be made Wednesday. Surviving players will be given enough further details to perform due diligence, then final bids will be due by March 25. Wells plans to announce its selection March 28, the day shareholder votes are scheduled on the merger.

The Federal Reserve has required Wells to select buyers of the branches before consummating the merger. Wells plans to complete the merger by April 1.

Knowledgeable sources said Wells has indicated its preference to have one company buy the entire package. It is also offering separate packages for Northern and Southern California.

That structure and Wells' interest in a speedy resolution mean that a big bank already in the state would likely have an advantage.

Glendale Federal Bank and Bank of the West are among other California institutions definitely planning to bid, according to knowledgeable sources. California Federal Bank is also considered a likely contender.

The investment banking firm Hovde Financial Inc. was also expected to put together a consortium of community banks that could include Westamerica Corp. and Vallicorp, sources added.

People involved in preparing bids say they expect deposit premiums to range from 6% to 8%. A knowledgeable source said Wells is also asking acquiring banks to pay severance packages to people laid off from the branches.

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