First Interstate Asks Fed to Clear Its Bid For BankAmerica, Warns of Hostile Offer
First Interstate Bancorp asked the Federal Reserve Board to clear its unsolicited bid to acquire BankAmerica Corp., and threatened to launch a hostile tender offer at slightly lower terms than its latest bid.</br></br>The Fed application is considered an unusual effort to further pressure BankAmerica's board into considering First Interstate's previously reported bid. The Los Angeles-based bank holding company is valuing its bid at $22 for each of BankAmerica's 154 million shares outstanding. On two occasions in the past five weeks, directors of the troubled San Francisco banking giant have refused to consider the bid, indicating a resolve to remain independent.</br></br>In the application, First Interstate also said it committed itself to raising some $550 million in primary capital before any merger was completed. The capital plan is an apparent effort to alleviate the concerns of some industry analysts and possibly regulators themselves that First Interstate's bid is long on paper but short on actual cash to cover future loan losses.</br></br>First Interstate's Fed filing wasn't immediately available, although the company said it would "accommodate either a negotiated or a non-negotiated merger transaction."</br></br>In Washington, a Fed spokesman declined to comment on the filing as a matter of policy. The Fed typically disposes of such filings in 90 days, although the spokesman said the process can extend much longer in "very complex cases," presumably including First Interstate's four-volume filing.