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Another blow to SunTrust
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July 23, 2001: 5:39 p.m. ET
Stockholder advisory firm picks First Union's $14.6B offer for Wachovia
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NEW YORK (CNNfn) - SunTrust Corp. received another setback Monday in its fight to acquire Wachovia Corp. when two stockholder advisory firms recommended shareholders pick First Union Corp.
Institutional Shareholder Services Inc., an independent advisory group, recommended that Wachovia and First Union shareholders vote for the proposed merger at Wachovia's annual meeting on Aug. 3 and at First Union's meeting on July 31. Proxy Monitor Inc. also weighed in and told Wachovia shareholders to vote for First Union $14.6 billion offer for Wachovia.
Atlanta-based SunTrust (STI: down $0.60 to $67.90, Research, Estimates) countered late Monday that, given Wachovia's large retail shareholder base and the fact that most larger institutions make their own decisions, ISS's decision will sway few votes. Further, SunTrust said its bid is financially superior and offers a better dividend.
"We believe that when Wachovia shareholders cast their votes on August 3, they will act in their own economic best interests," SunTrust CEO L. Phillip Humann.
Shares for SunTrust, Wachovia (WB: down $0.20 to $69.84, Research, Estimates) and First Union (FTU: down $0.26 to $34.74, Research, Estimates) closed nearly unchanged Monday.
In May, the board of Wachovia Corp. decided to stay with its $14.5 billion merger agreement with First Union Corp., again rejecting suitor SunTrust Banks Inc., which had offered an unsolicited $15.3 billion.
Last week, a North Carolina judge refused on Friday to nullify First Union Corp.'s $14.5 billion agreement to buy Wachovia Corp. The decision was seen as a major legal setback for SunTrust Banks to block First Union's bid for Wachovia. 
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