SunTrust Banks Inc. is trying to break up the merger plans of First Union Corp and Wachovia Corp. and announced Monday that it has submitted a proposal to Wachovia's board of directors to buy the Winston-Salem, N.C.-based banking company for $14.7 billion.
Atlanta-based SunTrust, which has been interested in Wachovia for some time, is offering to pay $70.06 per Wachovia share or some $1.3 billion over First Union's offer for Wachovia.
First Union and Wachovia agreed to merge last month in a deal that initially met with a lot of opposition from analysts convinced that the last thing First Union needed was another acquisition after years of deals had forced the bank to undergo a major restructuring.
"We are delighted to propose this combination which offers superior value to Wachovia's shareholders and we are confident that the terms of Wachovia's merger agreement with First Union will allow Wachovia's board of directors to consider our proposal consistent with its fiduciary obligation to Wachovia's shareholders," said L. Phillip Humann SunTrust's chairman, president and chief executive officer said in a prepared statement. "Our interest in a transaction with Wachovia goes back many years," he added. Based on Friday's closing prices SunTrust's offer represents a 17% premium to the value of First Union's offer for Wachovia.
The combination of SunTrust and Wachovia would create a banking company with $180 billion in combined assets and a presence in seven high growth states. It would represent a total of 7.5 million retail customers and create a banking company with number one market position for deposits in Georgia, South Carolina and Virginia.