Wells Fargo & Co. may be gaining the upper hand over First Bank System Inc. in the bitter battle to buy First Interstate Bancorp.

As investors tend to vote with their pocketbooks, the value of Wells stock has gone up while First Bank shares have dropped. As a result, the San Francisco Bank's hostile offer is now worth $9.12 per share more than First Bank's bid.

The stock market's new view of the Wells offer represents a sharp widening between the two bids since mid-November, a sign that the market may be warming to the unfriendly offer.

In fact, First Interstate shares are actually trading a few dollars above the value of First Bank's per share bid, suggesting that investors doubt the Minneapolis bank's offer will prevail.

"It is clear that Wells is slowly pulling away," said George Salem, a bank analyst with Gerard Klauer Mattison. "It is like a horse race in which Wells had a half-a-head lead and now is up by nearly a full length."

The value of the Wells bid at the close of trading Tuesday was $144.32 per First Interstate share, while First Bank, which has signed a friendly agreement to merge with the Los Angeles bank, trailed with a $135.20 per share offer.

Wells plans to meet with a select group of investors and analysts tonight, and has an 8 a.m. analysts' meeting scheduled tomorrow morning in New York as part of its effort to convince investors.

First Bank's is losing ground despite an investors road trip its executives took last week. Its stock has fallen 1% since mid-November.

This setback is the latest sign of trouble for First Bank, which appeared to have all the momentum in the weeks following the agreement. In fact, three days after the agreement to merge with Interstate, First Bank's offer was $1.55 per share more valuable than Well's bid.

But confidence in First Bank's stock has slipped amid a deluge of charges - some emanating from Wells' camp - that it has been buying back shares to artificially inflate the value of its bid.

First Interstate chief executive William E.B. Siart said he could not predict which side would win, said Keefe, Bruyette & Woods Inc. director of research David Berry, who met with Mr. Siart last week.

But he said that part of the reason the price of Wells shares has jumped 4% in the past two weeks is the rising market for bank stocks.

While many bank stocks are approaching their highs for the year, Wells is still more than $13 off the high it set Oct. 17 when the bank announced it intended to buy First Interstate.

"When Wells sweetened its bid (on Nov. 13), the stock declined five points, and it has simply gotten back to a point or two above the level from when the bid was sweetened," said Brent Erensel, a bank analyst with UBS Securities.

Some analysts said the recent price gain has put Wells in the driver's seat.

"Wells Fargo has a lock on the bid," said David Sloan, a fund manager with SIFE Trust Fund, which has actively been trading First Interstate stock and now holds roughly 50,000 shares.

"The whole situation shows me that Wells is pretty much going to do it, and this is just a waiting game," he added. "But if they need to pull out a larger bid, they will."

Mr. Sloan emphasized that First Bank's bid is lower than First Interstate's current market price. The share price of the target company in the months leading up to a deal's close usually lags the purchase price by 10%, Mr. Sloan said.

One arbitrager said he has not ruled out First Bank System, but conceded the Wells bid appears superior at this point.

With Wells officials scheduled to meet analysts in the coming days, Mr. Salem predicted Wells could put even more distance between its bid and First Bank's.

"Wells hasn't really fired away yet, but they are bringing all the top guns to New York: (chief executive Paul) Hazen, (chief operating officer William) Zuendt, and (chief financial officer Rodney) Jacobs," he said. "This is an important moment in the battle."

Wednesday night, Mr. Hazen is scheduled to dine with Keefe Bruyette's Mr. Berry, Lawrence Vitale of Bear, Stearns & Co., and Thomas Brown of Donaldson, Lufkin & Jenrette Inc. Money managers are also expected to attend.

Wells' presentation to analysts Thursday morning at the Sky Club in Metropolitan Life Building is a sign of the bank's intensity, Mr. Salem said. It has been almost a decade since Wells last brought together this many executives for an analysts' presentation, he said.

Mr. Siart expressed hope that the shareholder meeting to decide the winner would take place in February, Mr. Berry said.

If Wells continues to build its lead, however, it should win handily, Mr. Salem said.

First Interstate is arguing that merging with First Bank is vital for the company to remain competitive in an age of interstate banking, Mr. Berry said. But for that argument to win, he concluded, there cannot be a wide discrepancy between the two bids.

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