The Federal Reserve Board, which must rule on First Interstate Bancorp's application to acquire BankAmerica, has asked First Interstate to provide substantial additional information supporting its takeover bid.
In a Dec. 23 letter to First Interstate, officials of the San Francisco branch of the Fed said they had found numerous "informational deficiencies" in First Interstate's voluminous application.
The Fed's 10-page letter to First Interstate, released this week, requested further data on how the Los Angeles banking company intended to deal with questions of capital, cash flow, management, divestitures and antitrust issues relating to the proposed merger with BankAmerica.
Calls It 'Routine'
Ronald Supinski, a Fed spokesman, called the request for additional information "routine."
"We just told First Interstate that these are some of the areas where the Federal Reserve needs more information" when the bank submits a final application, Supinski said.
A First Interstate spokesman, Arthur Montgomery, said, "We have received the letter and are working on supplying the information they requested. We consider it a procedural matter and very routine."
First Interstate is preparing an exchange offer worth $3.2 billion for BankAmerica shares. It is seeking approval from the Fed and the Securities and Exchange Commission for the merger, which would be the biggest in U.S. banking history.
First Interstate needs Fed approval before it can begin accepting shares for the takeover.
Will Fight Merger
BankAmerica said earlier this month that it opposes the merger plan and will take all necessary steps to fight it.
The Fed asked First Interstate in the Dec. 23 letter to provide specific information about its plans, in the event of a merger, to sell BankAmerica or First Interstate branches in a number of California communities where they overlap. It also wanted more detail on First Interstate's plans in Washington state, where both it and BankAmerica own subsidiary banks.
First Interstate said that if the merger takes place it expects to divest most of the assets and offices of BankAmerica's Seafirst National Bank in Seattle. The Fed wants to know exactly what pieces of the Washington bank it intends to keep.
Asks for More Detail
The Fed also wants considerable financial detail on the combined bank's cash flow, tax status and capital structure.
It wants First Interstate to break down expected acquisition-related expenses, including severance pay, and to disclose its plans for keeping or firing BankAmerica executives and employees.
The Fed also asked First Interstate to provide BankAmerica with a complete copy of its 4-inch thick acquisition application. First Interstate had withheld portions from BankAmerica on grounds of confidentiality.