Norwest Corp. was expected to make a bid for First Interstate Bancorp. over the weekend.

First Interstate is already the target of a $10.1 billion hostile buyout by Wells Fargo & Co., but Norwest's move could signal the beginning of a bidding war.

Norwest, which is said to have retained Merrill Lynch & Co. as an investment banker, would not comment. Details of the rumored bid were not immediately available.

First Interstate also refused comment, though observers on Friday said the bank, which has been aggressively seeking other suitors, would likely be delighted with the new bid.

"I would have thought Norwest couldn't match Wells' bid, but they may have raised other financing sources or perhaps they decided the deal will be dilutive initially but that is acceptable because the combination will make sense in the long run," said Michael Stead, a fund manager with Sife Trust Fund in Walnut Creek, Calif.

Norwest's shares fell 25 cents to $30.125 Friday, largely in anticipation of a bid for First Interstate that would top Wells Fargo's offer of $129.50 a share. It was one of only a handful of top 50 banks to stumble during a strong rebound in bank stocks.

Analysts have said that for a non-California bank to top Wells' bid, a deal would likely entail dilution for the acquirer's shareholders.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.