SunTrust Bid Still Looking Better to Wachovia Holders

SunTrust's (STI Quote) surprise bid for Wachovia (WB Quote) has some investors ready to ignore First Union (FTU Quote), no matter how loudly it talks up its offer.

Tuesday morning First Union issued a press release outlining the merits of its merger with Wachovia, agreed to last month in a stock swap then valued at $13 billion and now valued at slightly less, given the retreat in First Union shares. But the SunTrust bid, unveiled Monday, remains about 7% richer and offers a number of other advantages, including SunTrust's superior management and the promise of fewer culture clashes.

"On the face of it, the SunTrust deal is superior to First Union," says Walnut Creek, Calif.-based Scott Edgar, who runs the roughly $760 million Sife Trust fund, which focuses on financial stocks and holds about 300,000 Wachovia and more than 410,000 SunTrust shares. "The currency of SunTrust is something we'd be more favorable with going forward," adds Edgar. "I don't even know the last time [SunTrust] wasn't in the portfolio. We haven't been owners of First Union for quite some time." ...