RS Financial Corp., North Carolina's largest independent thrift, has rejected an unsolicited offer to sell the company, but the bid could force a sale anyway, observers said.

The $787 million-asset company, the parent of Raleigh Federal Savings Bank, announced last week it would not accept the $30.50 a share bid made three weeks ago by First Citizens Bancshares, also of Raleigh.

A company statement, however, said RS Financial would explore a "combination with or acquisition by other financial services companies." These potential acquirers will include the spurned $6.6 billion-asset First Citizens, the statement said.

"I would be surprised if RS Financial wasn't sold as a result of this taking place," said Buddy Howard, of Equity Research in Raleigh.

The initial offer by First Citizens, valued at $84.5 million, was considered low by observers. They also found First Citizens' unsolicited advances unusual since most mergers result from private negotiations between two consenting parties.

This approach was used because First Citizens had no other choice, since its executive vice chairman, Frank B. Holding, and his family owned more than 7% of RS Financial stock, a First Citizens' spokesman said. Mr. Holding's filing with the Securities and Exchange Commission listed the stake as a "passive investment."

"This was not a question of being ill-mannered and not choosing a quiet courtship because his hands were tied in the procedure he could use," said Chris Bubin, a First Citizens spokesman. "If he had begun negotiating privately with RS Financial, that could've been construed as trying to mislead the SEC."

When First Citizens decided to try to acquire RS Financial, Mr Holding - whose brother, Lewis, is the chairman, and son, Frank Jr., is the president - amended his SEC filing to say his shares would be used in "active cooperation" with First Citizens' intentions, according to documents.

In the week following First Citizens' offer, Mr. Holding purchased 62,500 shares of RS Financial stock, most of which was bought on March 17 at $30.75 a share - more than what First Citizens was willing to pay in its takeover offer seven days earlier.

With a total of 9.5% of shares outstanding, Mr. Holding is the largest shareholder of RS Financial.

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