A New Deal for First Interstate : A Look at the Proposal : WHAT IT COULD MEAN
* Workers: First Interstate and First Bank System would cut 6,000 of 41,000 jobs, mainly administrative and data-processing positions. Many First Interstate corporate employees would move to headquarters in Minneapolis, but many key players would stay in Los Angeles.
* Customers: California First Interstate customers would see little change since First Bank has no branches in the state.
* Shareholders: Each share of First Interstate would be swapped for 2.6 shares of First Bank stock. Based on Monday’s closing stock prices, the First Bank deal is worth $129.68 per share and Wells Fargo & Co.’s rival stock-swap proposal is valued at $131.64 a share. First Interstate shares closed at $126.875, down 87.5 cents.
* Local economy: Minimal impact seen. The merged bank’s headquarters would be in Minneapolis, but some key executives and major operations would remain in Los Angeles and no branch closures are expected. Job losses would be much less severe than under a Wells Fargo takeover. * Competitors: A successful First Interstate-First Bank merger would leave Wells Fargo under pressure to find a suitable merger partner or be swallowed by larger national rivals. The combined First Interstate-First Bank could emerge as a stronger competitor in California.
* Branch Systems: Minimal. The companies overlap only in Wyoming, Montana and Colorado but together operate in 21 states.
What’s next
* Final approval: The banks expect to complete the deal in the second quarter of next year. The transaction must be approved by federal and state regulators as well as stockholders.
* Other bids: Wells Fargo has said it would consider raising its original bid but has not yet done so. Many analysts say there is room for higher bids, but some of First Interstate’s large institutional investors say they would be satisfied with First Bank System’s current offer. First Bank System would receive a $200-million breakup fee if the deal fell through.
Sources: Bloomberg Business News, Times and wire reports. Researched by JENNIFER OLDHAM / Los Angeles Times (BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
THE BANKS AT A GLANCE
First Interstate Bancorp and First Bank System overlap in only three states.
First Interstate Bankcorp:
* Assets: $55.1 billion
* Branches: 1,148
* Retail households:4.5 million
* Commercial customers: 226,000
* ATMs:1,796
* Total deposits: $48.2 billion
* Total loans: $36 billion
Earnings, in millions: $733.5 (1994)
First Bank System
* Assets: $37.3 billion
* Branches: 366
* Retail households: 3.1 million
* Commercial customers: 236,000
* ATMs: 2,896
* Total deposits: $25 billion
* Total loans: $28.3 billion
Earnings, in millions: $419.8 (1994)
