Filed by First Union Corporation
Pursuant to Rule 425 under the Securities
Act of 1933 and deemed filed pursuant to
Rule 14a-12 under the Securities Exchange
Act of 1934
Subject Company: Wachovia Corporation
Commission File No. 333-59616
Date: May 30, 2001
This filing contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements include,
but are not limited to, (i) statements about the benefits of the merger between
First Union Corporation and Wachovia Corporation, including future financial and
operating results, cost savings, enhanced revenues, and accretion to reported
earnings that may be realized from the merger; (ii) statements with respect to
First Union's and Wachovia's plans, objectives, expectations and intentions and
other statements that are not historical facts; and (iii) other statements
identified by words such as "believes", "expects", "anticipates", "estimates",
"intends", "plans", "targets", "projects" and similar expressions. These
statements are based upon the current beliefs and expectations of First Union's
and Wachovia's management and are subject to significant risks and
uncertainties. Actual results may differ from those set forth in the
forward-looking statements.
The following factors, among others, could cause actual results to
differ materially from the anticipated results or other expectations expressed
in the forward-looking statements: (1) the risk that the businesses of First
Union and Wachovia will not be integrated successfully or such integration may
be more difficult, time-consuming or costly than expected; (2) expected revenue
synergies and cost savings from the merger may not be fully realized or realized
within the expected time frame; (3) revenues following the merger may be lower
than expected; (4) deposit attrition, operating costs, customer loss and
business disruption following the merger, including, without limitation,
difficulties in maintaining relationships with employees, may be greater than
expected; (5) the ability to obtain governmental approvals of the merger on the
proposed terms and schedule; (6) the failure of First Union's and Wachovia's
stockholders to approve the merger; (7) competitive pressures among depository
and other financial institutions may increase significantly and have an effect
on pricing, spending, third-party relationships and revenues; (8) the strength
of the United States economy in general and the strength of the local economies
in which the combined company will conduct operations may be different than
expected resulting in, among other things, a
deterioration in credit quality or a reduced demand for credit, including the
resultant effect on the combined company's loan portfolio and allowance for loan
losses; (9) changes in the U.S. and foreign legal and regulatory framework; and
(10) adverse conditions in the stock market, the public debt market and other
capital markets (including changes in interest rate conditions) and the impact
of such conditions on the combined company's capital markets and asset
management activities. Additional factors that could cause First Union's and
Wachovia's results to differ materially from those described in the
forward-looking statements can be found in First Union's and Wachovia's reports
(such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K) filed with the Securities and Exchange Commission and
available at the SEC's Internet site (http://www.sec.gov). All subsequent
written and oral forward-looking statements concerning the proposed transaction
or other matters attributable to First Union or Wachovia or any person acting on
their behalf are expressly qualified in their entirety by the cautionary
statements above. First Union and Wachovia do not undertake any obligation to
update any forward-looking statement to reflect circumstances or events that
occur after the date the forward-looking statements are made.
The proposed transaction will be submitted to First Union's and
Wachovia's stockholders for their consideration, and, on April 26, 2001, First
Union filed a registration statement on Form S-4 with the SEC containing a
preliminary joint proxy statement/prospectus of First Union and Wachovia and
other relevant documents concerning the proposed transaction. Stockholders are
urged to read the definitive joint proxy statement/prospectus when it becomes
available and any other relevant documents filed with the SEC, as well as any
amendments or supplements to those documents, because they will contain
important information. You will be able to obtain a free copy of the
registration statement and the joint proxy statement/prospectus, as well as
other filings containing information about First Union and Wachovia, at the
SEC's Internet site (http://www.sec.gov). Copies of the joint proxy
statement/prospectus and the SEC filings that will be incorporated by reference
in the joint proxy statement/prospectus can also be obtained, without charge, by
directing a request to First Union, Investor Relations, One First Union Center,
Charlotte, North Carolina 28288-0206 (704-374-6782), or to Wachovia, Investor
Relations, 100 North Main Street, Winston-Salem, North Carolina 27150
(888-492-6397).
First Union and Wachovia, and their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the stockholders of First Union and Wachovia in connection with the merger.
Information about the directors and executive officers of First Union and their
ownership of First Union common stock is set forth in First Union's proxy
statement on Schedule 14A, as filed with the SEC on March 13, 2001. Information
about the directors and executive officers of Wachovia and their ownership of
Wachovia common stock is set forth in Wachovia's proxy statement on Schedule
14A, as filed with the SEC on March 19, 2001. Additional information regarding
the interests of those participants may be obtained by reading the definitive
joint proxy statement/prospectus regarding the proposed transaction when it
becomes available.
THE FOLLOWING ADVERTISEMENT RAN IN VARIOUS PUBLICATIONS ON MAY 30, 2001
[FIRST UNION LOGO]
An open letter to the investment community:
Eleven trading days in May
First Union and Wachovia have agreed on a strategic partnership that will
create a leading banking franchise with the potential for increased shareholder
value and strong long-term growth.
SunTrust has discussed a negotiated combination with Wachovia for many
years--without ever reaching an agreement--and has now resorted to a hostile
takeover bid. Over the last eleven trading days, as the market premium
initially offered by SunTrust has sharply declined, here is what we believe the
investment community wants to know.
1. Given that First Union's price-to-earnings ratio is below SunTrust's and
First Union's projected long-term earnings growth is above what SunTrust
has projected for itself, does First Union's stock offer more upside for
Wachovia's shareholders?
2. First Union has strong positions in high-growth businesses, including asset
management, brokerage and capital markets, and with Wachovia it will become
the fourth largest bank in the U.S. in a business where we believe scale
matters.Would SunTrust need to make substantial acquisitions in all these
high-growth businesses and in retail banking to match the competitive
position of a Wachovia-First Union?
3. Now that the Wachovia board has spoken and SunTrust has unleashed a barrage
of litigation, will SunTrust acknowledge that the continuation of its bid
is hostile? Is it appropriate to assume no revenue attrition in a hostile
transaction?
4. Can SunTrust truly avoid the serious problems, including loss of almost all
senior management and heavy deposit erosion that the last hostile
acquisition of a large bank incurred?
5. If SunTrust acquires Wachovia,will its pro-forma risk-adjusted capital
ratios rank dead last of the top 50 U.S. banks--as in Number 50? In prior
hostile transactions, have the regulators required the hostile bidder to
raise additional capital so that there is no capital diminution?
6. If one-time gains,trading gains and share repurchases are eliminated,how
much have SunTrust's earnings increased since the Crestar closing? How much
have trust revenues grown (or declined) since the Crestar closing?
7. Is it smart business for SunTrust to raise its dividend 120% over only
three years to one of the highest payout ratios among larger banks? If
SunTrust were to experience an earnings decline, would there be market or
regulatory pressure to reduce the dividend?
8. Does SunTrust agree that its hostile acquisition of Wachovia will generate
no new net incremental capital for more than 10 years?
9. Is it true that SunTrust's merger with Crestar was delayed for a number of
months because of an accounting dispute between SunTrust and the Securities
and Exchange Commission?
10. Is it true that SunTrust had significant systems conversion problems in the
Crestar transaction that persisted for several weeks?
11. Does SunTrust believe Crestar, its only $1 billion deal in the last dozen
years, prepares it to almost double in size through a hostile takeover?
As the market continues to focus on these issues, we believe that the
competitive advantages of a First Union and Wachovia combination are clear and
compelling.
First Union and Wachovia
The Right Combination
In connection with the proposed transaction with Wachovia, on April 26, 2001,
First Union filed a registration statement on Form S-4 with the Securities and
Exchange Commission containing a preliminary joint proxy statement/prospectus of
First Union and Wachovia. Stockholders are urged to read the definitive joint
proxy statement/prospectus regarding the proposed transaction when it becomes
available and any other relevant documents filed with the SEC because they will
contain important information. You may obtain a free copy of the registration
statement and the joint proxy statement/prospectus, without charge, at the SEC's
Internet site (http://www.sec.gov). Copies of these documents can also be
obtained, without charge, by directing a request to First Union Corporation,
Investor Relations, One First Union Center, 301 South College Street, Charlotte,
NC 28288-0206, 704-374-6782, or to Wachovia Corporation, Investor Relations, 100
North Main Street, Winston-Salem, NC 27150, 888-492-6397. Information regarding
the director and officer participants in the proxy solicitation and a
description of their direct and indirect interest, by security holdings or
otherwise, is contained in the proxy materials filed with the SEC by First Union
on March 13, 2001, and by Wachovia on March 19, 2001. The information presented
above may contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Factors that could cause actual
results to differ materially from those described in the forward-looking
statements can be found in First Union's and Wachovia's public reports filed
with the SEC.
THE FOLLOWING NEWS RELEASE WAS ISSUED BY FIRST UNION AND WACHOVIA
[FIRST UNION LOGO] [WACHOVIA LOGO]
Media Contacts:
First Union: Ginny Mackin 704-383-3715
Mary Eshet 704-383-7777
Wachovia: Ed L. Hutchins 336-732-4200
Jay E. Reed 336-732-5855
Investor Contacts:
First Union: Alice Lehman 704-374-4139
Wachovia: Robert S. McCoy Jr. 336-732-5926
Marsha L. Smunt 336-732-5788
WACHOVIA AND FIRST UNION MODIFY OPTION AGREEMENTS
CHARLOTTE and WINSTON-SALEM, N.C., May 30, 2001 - Wachovia Corporation (NYSE:WB)
and First Union Corporation (NYSE:FTU) today announced that they have amended
certain provisions in their reciprocal option agreements granted in their merger
of equals to eliminate any possible distraction of shareholders from the merits
of the First Union-Wachovia merger.
As previously announced in their merger-of-equals transaction announced on April
16, 2001, Wachovia and First Union granted each other the right to purchase
under certain circumstances (none of which has occurred) up to 19.9 percent of
the other company's common shares. As amended, the consideration paid on the
exercise of such options must consist of cash or readily marketable debt or
preferred stock issued by the option holder. These securities must have a fair
market value equal to the option exercise price as agreed upon by both parties'
investment bankers. Also, First Union and Wachovia clarified certain provisions
of the reciprocal options to confirm clearly that the maximum profit that may be
derived by a party exercising the option is capped at $780 million in all
circumstances.
The companies said that the property exercise feature of the options had
appeared to distract some shareholders unnecessarily from the merits of the
First Union - Wachovia merger of equals. As a result, the companies agreed to
the amendment. The companies said their merger of equals is moving forward on
schedule on integration and regulatory fronts.
First Union Corporation, with $253 billion in assets and stockholders' equity of
$16 billion at March 31, 2001, is a leading provider of financial services to 15
million retail and corporate customers throughout the East Coast and the nation.
The company operates full-service banking offices in 11 East Coast states and
Washington, D.C., and full-service brokerage offices in 47 states. Online
banking products and services can be accessed through www.firstunion.com.
Wachovia Corporation, with dual headquarters in Atlanta and Winston-Salem, N.C.,
is a leading financial holding company serving regional, national and
international markets. As of March 31, 2001, Wachovia had assets of $75.6
billion. Member companies offer consumer and commercial banking, bank card,
asset and wealth management, capital markets and investment banking, community
development finance, brokerage and insurance services. Wachovia Bank, N.A., the
principal subsidiary, has nearly 650 offices and 1,350 ATMs primarily in
Florida, Georgia, North Carolina, South Carolina and Virginia.
This news release may contain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, including, without
limitation, (i) statements about the benefits of the merger between First Union
Corporation and Wachovia Corporation, including future financial and operating
results, cost savings, enhanced revenues, and accretion to reported earnings
that may be realized from the merger; (ii) statements with respect to First
Union's and Wachovia's plans, objectives, expectations and intentions and other
statements that are not historical facts; and (iii) other statements identified
by words such as "believes", "expects", "anticipates", "estimates", "intends",
"plans", "targets", "projects" and similar expressions. These statements are
based upon the current beliefs and expectations of First Union's and Wachovia's
management and are subject to significant risks and uncertainties. Actual
results may differ from those set forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements: (1) the risk that the businesses of First Union and
Wachovia will not be integrated successfully or such integration may be more
difficult, time-consuming or costly than expected; (2) expected revenue
synergies and cost savings from the merger may not be fully realized or realized
within the expected time frame; (3) revenues following the merger may be lower
than expected; (4) deposit attrition, operating costs, customer loss and
business disruption following the merger, including, without limitation,
difficulties in maintaining relationships with employees, may be greater than
expected; (5) the ability to obtain governmental approvals of the merger on the
proposed terms and schedule; (6) the failure of First Union's and Wachovia's
stockholders to approve the merger; (7) competitive pressures among depository
and other financial institutions may increase significantly and have an effect
on pricing, spending, third-party relationships and revenues; (8) the strength
of the United States economy in general and the strength of the local economies
in which the combined company will conduct operations may be different than
expected resulting in, among other things, a deterioration in credit quality or
a reduced demand for credit, including the resultant effect on the combined
company's loan portfolio and allowance for loan losses; (9) changes in the U.S.
and foreign legal and regulatory framework; and (10) adverse conditions in the
stock market, the public debt market and other capital markets (including
changes in interest rate conditions) and the impact of such conditions on the
combined company's capital markets and asset management activities. Additional
factors that could cause First Union's and Wachovia's results to differ
materially from those described in the forward-looking statements can be found
in First Union's and Wachovia's reports (such as Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the
Securities and Exchange Commission and available at the SEC's Internet site
(http://www.sec.gov). All subsequent written and oral forward-looking statements
concerning the proposed transaction or other matters attributable to First Union
or Wachovia or any person acting on their behalf are expressly qualified in
their entirety by the cautionary statements above. First Union and Wachovia do
not undertake any obligation to update any forward-looking statement to reflect
circumstances or events that occur after the date the forward-looking statements
are made.
Additional Information
The proposed transaction will be submitted to First Union's and Wachovia's
stockholders for their consideration, and, on April 26, 2001, First Union filed
a registration statement on Form S-4 with the SEC containing a preliminary joint
proxy statement/prospectus of First Union and Wachovia and other relevant
documents concerning the proposed transaction. Stockholders are urged to read
the definitive joint proxy statement/prospectus when it becomes available and
any other relevant documents filed with the SEC, as well as any amendments or
supplements to those documents, because they will contain important information.
You will be able to obtain a free copy of the registration statement and the
joint proxy statement/prospectus, as well as other filings containing
information about First Union and Wachovia, at the SEC's Internet site
(http://www.sec.gov). Copies of the joint proxy statement/prospectus and the SEC
filings that will be incorporated by reference in the joint proxy
statement/prospectus can also be obtained, without charge, by directing a
request to First Union, Investor Relations, One First Union Center, Charlotte,
North Carolina 28288-0206 (704-374-6782), or to Wachovia, Investor Relations,
100 North Main Street, Winston-Salem, North Carolina 27150 (888-492-6397).
First Union and Wachovia, and their respective directors and executive officers
may be deemed to be participants in the solicitation of proxies from the
stockholders of First Union and Wachovia in connection with the merger.
Information about the directors and executive officers of First Union and their
ownership of First Union common stock is set forth in First Union's proxy
statement on Schedule 14A, as filed with the SEC on March 13, 2001. Information
about the directors and executive officers of Wachovia and their ownership of
Wachovia common stock is set forth in
Wachovia's proxy statement on Schedule 14A, as filed with the SEC on March 19,
2001. Additional information regarding the interests of those participants may
be obtained by reading the definitive joint proxy statement/prospectus regarding
the proposed transaction when it becomes available.
THE FOLLOWING NEWS RELEASE WAS ISSUED BY FIRST UNION
NEWS
Wednesday Media Contacts:
May 30, 2001 Ginny Mackin 704-383-3715
Mary Eshet 704-383-7777
[FIRST UNION LOGO] Investor Contact:
Alice Lehman 704-374-4139
FIRST UNION CEO THOMPSON CONFIDENT THAT SHAREHOLDERS WILL
CONCLUDE MERGER WITH FIRST UNION IS BEST FOR WACHOVIA
---------------------------------------------------------------
Response to SunTrust's Conference Call Presentation
Charlotte, N.C. -- First Union's chief executive officer, Ken Thompson, made the
following statement in response to today's SunTrust conference call presentation
relating to its hostile bid for Wachovia and attacks on the Wachovia/First Union
merger of equals currently in progress.
"We're very confident that, despite SunTrust's hostile efforts and rhetoric, the
Wachovia/First Union merger of equals will continue to gain broad support. As
shareholders focus on the most important factor, which is the potential for
growth and increasing shareholder value, we believe that they will come to the
same conclusion as Wachovia's Board of Directors: that a merger with First Union
is clearly in the best interests of Wachovia's shareholders.
"There is nothing new in SunTrust's presentation. If shareholders clearly review
the facts, the economics and the strategic and cultural fit in our merger of
equals, I firmly believe they will agree that First Union is offering them a
superior deal."
On May 22, 2001, Wachovia's Board of Directors strongly reaffirmed the First
Union/Wachovia merger of equals and the integration planning of the two
companies is proceeding smoothly.
First Union and Wachovia believe the new Wachovia will be a powerful force in
banking with over 19 million customers, and diversified income from
international, national and regional businesses, asset management, wealth
management and capital markets.
First Union (NYSE:FTU), with $253 billion in assets and stockholders' equity of
$16 billion at March 31, 2001, is a leading provider of financial services to 15
million retail and corporate customers throughout the East Coast and the nation.
The company operates full-service banking offices in 11 East Coast states and
Washington, D.C., and full-service brokerage offices in 47 states and
internationally. Online banking products and services can be accessed through
www.firstunion.com.
Wachovia Corporation, with dual headquarters in Atlanta and Winston-Salem, N.C.,
is a leading financial holding company serving regional, national and
international markets. As of March 31,
2001, Wachovia had assets of $75.6 billion. Member companies offer consumer and
commercial banking, bank card, asset and wealth management, capital markets and
investment banking, community development finance, brokerage and insurance
services. Wachovia Bank, N.A., the principal subsidiary, has nearly 650 offices
and 1,350 ATMs primarily in Florida, Georgia, North Carolina, South Carolina and
Virginia.
This news release may contain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, including, without
limitation, (i) statements about the benefits of the merger between First Union
Corporation and Wachovia Corporation, including future financial and operating
results, cost savings, enhanced revenues, and accretion to reported earnings
that may be realized from the merger; (ii) statements with respect to First
Union's and Wachovia's plans, objectives, expectations and intentions and other
statements that are not historical facts; and (iii) other statements identified
by words such as "believes", "expects", "anticipates", "estimates", "intends",
"plans", "targets", "projects" and similar expressions. These statements are
based upon the current beliefs and expectations of First Union's and Wachovia's
management and are subject to significant risks and uncertainties. Actual
results may differ from those set forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements: (1) the risk that the businesses of First Union and
Wachovia will not be integrated successfully or such integration may be more
difficult, time-consuming or costly than expected; (2) expected revenue
synergies and cost savings from the merger may not be fully realized or realized
within the expected time frame; (3) revenues following the merger may be lower
than expected; (4) deposit attrition, operating costs, customer loss and
business disruption following the merger, including, without limitation,
difficulties in maintaining relationships with employees, may be greater than
expected; (5) the ability to obtain governmental approvals of the merger on the
proposed terms and schedule; (6) the failure of First Union's and Wachovia's
stockholders to approve the merger; (7) competitive pressures among depository
and other financial institutions may increase significantly and have an effect
on pricing, spending, third-party relationships and revenues; (8) the strength
of the United States economy in general and the strength of the local economies
in which the combined company will conduct operations may be different than
expected resulting in, among other things, a deterioration in credit quality or
a reduced demand for credit, including the resultant effect on the combined
company's loan portfolio and allowance for loan losses; (9) changes in the U.S.
and foreign legal and regulatory framework; and (10) adverse conditions in the
stock market, the public debt market and other capital markets (including
changes in interest rate conditions) and the impact of such conditions on the
combined company's capital markets and asset management activities. Additional
factors that could cause First Union's and Wachovia's results to differ
materially from those described in the forward-looking statements can be found
in First Union's and Wachovia's reports (such as Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the
Securities and Exchange Commission and available at the SEC's Internet site
(http://www.sec.gov). All subsequent written and oral forward-looking statements
concerning the proposed transaction or other matters attributable to First Union
or Wachovia or any person acting on their behalf are expressly qualified in
their entirety by the cautionary statements above. First Union and Wachovia do
not undertake any obligation to update any forward-looking statement to reflect
circumstances or events that occur after the date the forward-looking statements
are made.
Additional Information
The proposed transaction will be submitted to First Union's and Wachovia's
stockholders for their consideration, and, on April 26, 2001, First Union filed
a registration statement on Form S-4 with the SEC containing a preliminary joint
proxy statement/prospectus of First Union and Wachovia and other relevant
documents concerning the proposed transaction. Stockholders are urged to read
the definitive joint proxy statement/prospectus when it becomes available and
any other relevant documents filed with the SEC, as well as any amendments or
supplements to those documents, because they will contain important information.
You will be able to obtain a free copy of the registration statement and the
joint proxy statement/prospectus, as well as other filings containing
information about First Union and Wachovia, at the SEC's Internet site
(http://www.sec.gov). Copies of the joint proxy statement/prospectus and the SEC
filings that will be incorporated by reference in the joint proxy
statement/prospectus can also be obtained, without charge, by directing a
request to First Union, Investor Relations, One First Union Center, Charlotte,
North Carolina 28288-0206 (704-374-6782), or to Wachovia, Investor Relations,
100 North Main Street, Winston-Salem, North Carolina 27150 (888-492-6397).
First Union and Wachovia, and their respective directors and executive officers
may be deemed to be participants in the solicitation of proxies from the
stockholders of First Union and Wachovia in connection with the merger.
Information about the directors and executive officers of First Union and their
ownership of First Union common stock is set forth in First Union's proxy
statement on Schedule 14A, as filed with the SEC on March 13, 2001. Information
about the directors and executive officers of Wachovia and their ownership of
Wachovia common stock is set forth in Wachovia's proxy statement on Schedule
14A, as filed with the SEC on March 19, 2001. Additional information regarding
the interests of those participants may be obtained by reading the definitive
joint proxy statement/prospectus regarding the proposed transaction when it
becomes available.