Judging from the recent behavior of Wachovia Corp.'s stock, investors seem to expect that either SunTrust Banks Inc. or First Union Corp. will raise their competing offers for the company or that a third suitor will emerge.

"The market is betting that another bidder will enter the fray," said Marni Pont O'Doherty, an analyst at Keefe, Bruyette & Woods Inc. in New York.

The Friday before SunTrust made its offer to acquire Winston-Salem, N.C.-based Wachovia, SunTrust stock traded at $70.06, 2.9% above its 52-week high of $68.07 and well above Wachovia's stock price.

SunTrust's $14.7 billion bid trumped that of First Union, which struck a friendly $13.4 billion deal with Wachovia over Easter weekend. SunTrust's May 14 offer was a 16.7% premium to First Union's offer and 6% higher than Wachovia's closing stock price on May 11.

Since then Wachovia shares have been sneaking up on SunTrust, and last Wednesday edged 0.23% higher than SunTrust's bid. In trading Tuesday, Wachovia shares were trading more than $1 higher - 2% more - than SunTrust's offer.

SunTrust chief executive officer L. Phillip Humann has insisted that his company would not raise its bid and "bid against itself."

Wachovia shareholders are to vote on the First Union offer at an Aug. 3 meeting. Analysts, many of whom suspect that a third bidder will not materialize, despite market sentiment, said there is plenty of time to change investors' minds.

"If the shareholder vote … does not go in favor of the First Union deal, maybe another bidder will take a look," Ms. O'Doherty said. "The risk would be for both companies to raise their bids and the stocks trade down in response."

A lot more will happen before then.

Second-quarter earnings will be released in about a month, and people will be judging which company looks stronger and which suitor they like better, said Michael A. Plodwick, an analyst at UBS Warburg. "Both sides will be throwing mud at each other," he added.

The fur is already flying. This week SunTrust, amid a flurry of lawsuits filed by all three companies, proposed an amendment to be voted on at the Aug. 3 meeting. It would allow holders of 10% of Wachovia shares to force their own special meeting at which they could propose to increase Wachovia's board of directors and elect nominees who support a SunTrust merger.

At the end of trading Tuesday, Wachovia shares rose .75%, SunTrust's stock increased 0.48%, and First Union's stock rose .1.5%.

On a bullish day, the Dow Jones industrial average rose 1%, while the Nasdaq climbed 3.6%. The American Banker index of the top 225 banks rose 1.05%.

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