Shares of SunTrust Banks Inc. held steady Wednesday, the day after Wachovia Corp.’s board of directors rejected its $14.7 billion takeover proposal in favor of First Union Corp’s offer.

Investors, aware that SunTrust’s fight for Wachovia is probably not over, seemed reluctant to dump shares in the Atlanta company. SunTrust took its case to court Wednesday, and experts say this could turn into a protracted legal battle and damage SunTrust’s share price (see article starting on page 1). SunTrust’s stock fell 1.15% Wednesday. The American Banker index of 225 banks fell 0.86% and the Standard & Poor’s 500 index 1.53%.

Katrina Blecher, an analyst with Sandler O’Neill & Partners, said investors seemed to be split in two camps: those who want SunTrust to drop its pursuit of Wachovia and those who have confidence in it regardless of its sudden turnaround in dealmaking.

SunTrust historically has shied from risky deals, a philosophy that helped its shares outperform other bank stocks during the consolidation wave in the ’90s. Investors who have come to like this philosophy want SunTrust to stick to it, throw in the towel on the Wachovia bid, and stay away from similar attempts.

Daniel G. Bandi, a portfolio manager with National City Corp., in Cleveland, which holds a position in both First Union and SunTrust, said he wants the Atlanta company to walk away from its pursuit of Winston-Salem, N.C.-based Wachovia.

“SunTrust has more at stake,” Mr. Bandi said, including its higher stock valuation. Also, buying a company is risky, but buying Wachovia is less of a risk for First Union because it is much larger than SunTrust.

An investor who asked not to be named remarked that “few deals ever benefit” the buyer’s shareholders.

Wall Street matchmakers have long seen SunTrust and Wachovia as a good fit and thought they would consummate a deal someday.

“But now some SunTrust investors fear that Wachovia might have problems they don’t know about,” said Michael T. O’Brien, president of KBW Asset Management, a subsidiary of Keefe, Bruyette & Woods Inc.

Besides that, some SunTrust investors fear that the company might raise its offer to make it more attractive to Wachovia’s shareholders, some of whom have said they want SunTrust to beat out First Union.

SunTrust has vowed to go after the votes of Wachovia shareholders, but Ms. Blecher said it will probably not raise its price and that it probably will not seek another acquisition if it fails to make this one.

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