STRATEGIC PARTNERS
March 6, 2002
CHARLOTTE, N.C. -- First Union Corp., in an unusual move, issued a statement on Oct. 6 denying that it is in merger talks with Wells Fargo, the nation's fifth-largest bank.
``There is absolutely no truth to the rumor that First Union is or has been engaged in merger discussions with Wells Fargo,' First Union, the nation's number six bank, said in a statement.
First Union typically doesn't comment on merger or market speculation, but made an exception in this case because media reports were causing ``employee confusion' at headquarters in Charlotte where 15,000 of 70,000 First Union employees are based, according to the Associated Press.
The speculation began when the New York-based publication Wall Street Letter, citing unnamed First Union managers and brokers, said Wells Fargo might buy First Union for $42 a share.
First Union shares fell nearly 5 percent, or $1.56, on the news to close at $31.19 on the New York Stock Exchange, where shares of Wells Fargo were off $1.13, or 2 percent, at $46.56.
First Union's stock price has suffered over the past 12 months because of earnings pressures common to other banks. Critics say it paid too much for its 1998 acquisition of CoreStates Financial Corp., had a run of bad customer service and made losing bets on businesses like The Money Store.
