B of A Directors Vow to Fight Any Hostile Bid

BankAmerica’s board of directors refused again Monday to consider First Interstate Bancorp’s $3.4-billion acquisition offer and served notice that BankAmerica would fight back against any hostile bid launched by its Los Angeles-based suitor.

“It is most unfortunate that First Interstate continues to insist on ignoring . . . the unanimous request of our board of directors that it withdraw its proposal,” said A. W. Clausen, chairman and chief executive of the embattled banking giant.

Last month, BankAmerica’s directors asked First Interstate to withdraw the acquisition bid. On Monday, the board went further, authorizing management to “take such actions as may be appropriate” to ward off any “unilateral” move by First Interstate.

BankAmerica, Clausen added, “holds one of the most valuable franchises in the financial services industry, and we do not intend to allow that franchise to be dismembered . . . under the artificial pressures of publicity and argument that are so much a part of the merger and acquisition mania.”

BankAmerica--parent of Bank of America, the nation’s second-largest bank--has sustained operating losses of nearly $1.5 billion during the past seven quarters, hurting its stock price and leaving it vulnerable to a takeover.

“The BankAmerica statement fairly bristles,” said Donald Crowley, an analyst who follows BankAmerica for the brokerage firm of Keefe, Bruyette & Woods in San Francisco. Still, he added, “the standoff continues.”

First Interstate had no immediate comment. The suitor is known to be exploring such options as a hostile tender offer or a proxy fight to elect a board with a mandate to negotiate a merger.

But several measures announced by BankAmerica’s board on Monday could complicate a proxy fight. A bylaw amendment requires that director nominations and shareholder proposals be made 30 to 60 days in advance of BankAmerica’s annual shareholders meeting. Before the change, the bylaws had no such requirement.