SunTrust Makes Bid for Wachovia

SunTrust Banks Inc. said it launched an unsolicited $13.5-billion bid for fellow regional bank Wachovia Corp., topping an earlier offer from First Union Corp., in a drive to widen its reach in the Southeast.

SunTrust’s surprise bid, which values Winston Salem, N.C.-based Wachovia at $64.86 a share, is about 6% higher than a rival offer of $61.16 a share from No. 6 U.S. bank holding company First Union.

SunTrust also disclosed it was close to buying Wachovia in December but its proposal was spurned. A combination with Wachovia would form a bank with about $180 billion in assets and more than 7.5 million retail customers.

Wall Street braced for a dramatic, three-way showdown among the banks.

On the New York Stock Exchange, Wachovia shares rose $3.85 to close at $64.75, while shares of Atlanta-based SunTrust fell $4.81, to close at $60.