In a memo to employees last week, Wells Fargo & Co. chairman Paul Hazen downplayed comments that had triggered new speculation the company was in merger talks.

Wells shares soared Thursday after Mr. Hazen told a Bloomberg News reporter at a banking conference in New Orleans that the $97.7 billion- asset bank would consider a buyout.

But in a Dec. 4 memo to the 33,000 employees of the San Francisco-based company, Mr. Hazen criticized the story as containing "no new information" but being "written in such a way that it has created speculation about our company's status.

"Because of our fiduciary responsibility to our shareholders, we have always stated candidly that a shareholder-driven company like Wells Fargo would have to consider offers if the price was right and it materially increased shareholder value," the memo said.

"We have made statements like this since the mid-1980s and they have never implied we are engaged in acquisition discussions."

Mr. Hazen also noted that Wells would be very expensive; analysts put the price at $35 billion, or $400 to $425 per share.

But price isn't the only consideration in an acquisition. "Other factors, such as future earnings growth that we could generate on our own, must be considered," Mr. Hazen's memo said.

To be sure, analysts said, not many companies could afford to buy Wells. Those that could, however, include Charlotte, N.C.-based NationsBank Corp. and Banc One Corp. of Columbus, Ohio. These two would be logical acquirers because of their size and strategies, analysts said.

U.S. Bancorp of Minneapolis might also be interested in a merger of equals with Wells Fargo, analysts added.

Spokesmen at NationsBank, Banc One, and U.S. Bancorp refused to comment about possible deals.

The run-up in Wells' stock last week was largely a reflection of the fact that most investors believe more blockbuster bank mergers are going to take place, analysts said.

"It's more likely a market looking for the next takeover story," said Joseph Morford, an analyst with BT Alex. Brown.

Mr. Morford said he does not believe this is the right time for Wells to sell. The company has had poor earnings because of lost business from its 1996 acquisition of First Interstate, but Mr. Morford said he believes that Wells is working through its problems. "Management is unlikely to sell when earnings are depressed," he said.

"Is Wells a takeover candidate? At this point, I don't think so," said R. Jay Tejera, an analyst with Dain Bosworth Inc. "I don't think it would be very smart for the board to look at that now."

Mr. Tejera believes the company may be more willing to sell when earnings improve so it can command a higher price. But more importantly, he said, some of the biggest banks that could buy Wells aren't doing mergers or have their hands full with pending deals.

"The guys you want at the table bidding hard are not there," Mr. Tejera said.

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