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Battling for control of Winston-Salem, N.C.-based Wachovia Corp., First Union Corp. asked the U.S. Securities and Exchange Commission on Thursday to look into comments made in April by L. Phillip Humann, CEO of rival bidder SunTrust Banks Inc. Humann told analysts in New York that SunTrust would concentrate on taking business from First Union-Wachovia after the banks began their integration process. According to a source familiar with the company, First Union believes those comments may have misled investors about SunTrust’s intentions and violated SEC guidelines. SEC spokesman John Heine would not say if such a request had been made or if the SEC was taking any action. “Judgments have to be made, of course,” he said. “There’s lots of things that roll in that aren’t followed up on.” The First Union request is the latest indication the fight for Wachovia is about to turn nasty. On Wednesday, SunTrust bought ads in five North Carolina papers pitching its bid. The ads, signed by Humann, stressed that SunTrust was offering to cut fewer jobs and keep its “North Carolina banking headquarters” in Winston-Salem. Meanwhile, First Union CEO G. Kennedy Thompson told investors and analysts Thursday that even if successful, SunTrust would suffer the “havoc of a hostile takeover.” Such appeals carry heavy sway in a region that counts on and invests in homegrown companies. Gayle Anderson, president of the Greater Winston-Salem Chamber of Commerce, said that regional ties have influenced the process so far. “I don’t know them well enough to know if it was better to do a merger with a North Carolina bank than somebody else,” Anderson said. “But it seems like it was a major concern to keep as much here as was reasonable.” Wachovia, through its management, directors and employee retirement plans, controls 17.5 percent of its own stock. By comparison, Pittsburgh-based Mellon Financial Corp. and National City Corp., based in Cleveland, have 2 percent insider ownership positions, as does Wachovia’s crosstown rival. BB&T Corp. “That’s unusual for a bank of that size,” said Richard A. Bennett, director of corporate governance at Lens Investment Management LLC, a Portland, Maine-based shareholder activist group watching the battle. “Those votes are locked up.” For the moment, they are locked up with First Union. Though the Wachovia board is set to review the SunTrust bid next week, sources inside and outside the company say the terms, including a $1 billion premium, are unlikely to sway directors from its friendly deal with First Union. A spokesman for Wachovia declined comment. A First Union spokesman did not return calls. With 52 percent of Wachovia in the hands of 786 institutional investors, it’s likely those firms will be the ultimate judge of which bid is better, according to Bennett. At the top of the list are big mutual and pension fund companies FMR Holdings Corp., which owns 1.3 percent, Vanguard Group, which owns 1.9 percent, and Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA CREF), which owns less than 1 percent. “Vanguard and Fidelity are not typical activists,” Bennett said. “They’re low key and do their work behind the scenes. TIAA CREF is well known for raising hackles.” TIAA, under the corporate governance chief Kenneth Bertsch, has a record of publicly challenging companies. Bertsch is battling Raytheon over extra fees it paid to its auditors. Bertsch declined comment. Copyright (c)2001 TDD, LLC. All rights reserved.

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