The Securities and Exchange Commission Friday approved First Bank System's plan to buy First Interstate Bancorp, but with one potentially deal-killing caveat - the Minneapolis company would have to suspend its share repurchase for two years once the transaction was completed.

The decision came less than a day after the Minneapolis bank had received some rare good news in the long-running battle for First Interstate: the Delaware Chancery Court ruled the Los Angeles bank's board was not obligated to accept the highest price it is offered. First Bank's bid is significantly lower than that of rival Wells Fargo & Co..

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