SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant //
Filed by a Party other than the Registrant /x/
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for the use of the Commission
only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/x/ Soliciting Material Pursuant to Rule 14a-12
WACHOVIA CORPORATION
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(Name of Registrant As Specified In Its Charter)
SUNTRUST BANKS, INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (set forth the amount on which the
filing fee is calculated and state how it was determined):
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[Logo of SunTrust Banks, Inc.]
Contacts:
Investors Media George Sard/
Gary Peacock Barry Koling Debbie Miller/
SunTrust SunTrust Denise DesChenes
404-658-4879 404-230-5268 Citigate Sard Verbinnen
212-687-8080
For Immediate Release
May 30, 2001
SUNTRUST UPDATES INVESTMENT COMMUNITY;
MOVING AHEAD WITH SUPERIOR PROPOSAL TO MERGE WITH WACHOVIA
Files Federal Reserve Application And Amended Preliminary
Proxy Statement; Will Solicit Wachovia Shareholders To Vote
Against First Union Transaction On August 3
ATLANTA, GA -- SunTrust Banks, Inc. (NYSE: STI) today told investors it is
moving ahead with its proposal to merge with Wachovia Corporation (NYSE:
WB) and that it is filing the required application with the Federal Reserve
today and has refiled its preliminary proxy statement to solicit Wachovia
shareholders to vote against the First Union/Wachovia transaction at a
special shareholder meeting on August 3, 2001. SunTrust plans to mail its
proxy statement to Wachovia shareholders as soon as it is permitted to do
so by the Securities and Exchange Commission.
In a conference call with the investment community today, Phil
Humann, SunTrust Chairman, President and Chief Executive Officer, said
SunTrust believes its proposal is superior in many ways to the First
Union/Wachovia transaction, despite the fact that First Union and Wachovia
have amended their transaction three times since SunTrust made its
proposal. SunTrust's proposal offers:
o Higher current value: SunTrust's proposal offers a current premium. At
yesterday's closing prices, SunTrust's proposal offers Wachovia
shareholders $2.08 per share more than the First Union/Wachovia
transaction, or additional total value of approximately $437 million.
o Stronger currency: SunTrust offers Wachovia shareholders a
demonstrably stronger currency than First Union. SunTrust has
delivered stronger price performance and higher total returns to
shareholders than First Union over the past 1, 5 and 10 years.
o Faster earnings growth: Based on historical results and analyst 2001
estimates, SunTrust's five- year compound annual growth rate in core
earnings per share was 12% (adjusted for stock splits and excluding
non-recurring items and merger-related restructuring charges) compared
to -4% for First Union on the same basis.
o Simpler and better dividend: SunTrust believes its proposal offers a
simpler and better dividend. In addition to increasing the per share annual
dividend on its common stock to $2.22 so Wachovia shareholders would
receive on a pro forma basis the same $2.40 annual dividend they currently
receive, the SunTrust proposal provides the opportunity to share in its
dividend growth. SunTrust has raised its dividend every year for the past
16 years and never cut it -- and has significant additional capacity for
dividend increases. First Union proposes two alternatives to supplement its
per share annual dividend of $1.92 on a pro forma basis - either a special
dividend of $0.48 per share that applies for only one year or a complex new
preferred stock whose workings First Union and Wachovia have not fully
disclosed.
o Lower integration risk: SunTrust believes its proposal offers lower
integration risk. First Union has estimated higher cost savings of
$890 million, 78% higher than SunTrust's more conservative estimate of
$500 million. The First Union proposal will result in 3,000 more job
losses and 125- 150 more branch closures, which SunTrust believes will
lead to greater disruption for customers, employees and communities.
o Stronger capital position: SunTrust believes the tangible common ratio
is the most appropriate measure of capital strength, and on this basis
SunTrust will have a stronger capital position than First Union.
SunTrust's estimated pro forma tangible common ratio will be 5.63%,
well above First Union's 4.78%.
o Superior credit quality: SunTrust has a history of credit quality
superior to First Union and far better credit quality today. As of
March 31, 2001, the most recent statistics available, SunTrust's net
charge-off ratio was .38%, well below First Union's .53%, and a
non-performing asset ratio of .52%, far better than First Union's
1.30%.
Mr. Humann stated, "Our goal today is to set the record straight
and make sure Wachovia shareholders have facts, not promises or
projections, upon which to base their decision about which of two competing
merger proposals is superior. Wachovia shareholders do have a choice. We
have been gratified by the positive reaction to our proposal and are
strengthened in our conviction it is better for all Wachovia constituents -
shareholders, employees, customers and communities. In our view, the simple
reality remains that SunTrust is offering a higher current value, a
stronger currency, a history of faster earnings growth, a simpler and
better dividend, lower integration risk, a stronger capital position, and
superior credit quality. That is the message we will be taking to Wachovia
shareholders and we have confidence they will respond positively."
SunTrust Banks, Inc. is the nation's ninth-largest commercial banking
organization. The Company operates through an extensive distribution network in
Alabama, Florida, Georgia, Maryland, Tennessee, Virginia, and the District of
Columbia and also serves customers in selected markets nationally. Its primary
businesses include traditional deposit and credit services as well as trust and
investment services. Through various subsidiaries the Company provides credit
cards, mortgage banking, insurance, brokerage and capital markets services.
This release 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 a merger between
SunTrust and Wachovia, including future financial and operating results, cost
savings and accretion to reported and cash earnings that may be realized from
such merger; (ii) statements with respect to SunTrust'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 SunTrust'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 businesses of
SunTrust and Wachovia may 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, including, without limitation, difficulties in maintaining
relationships with employees, customers, clients or suppliers, may be greater
than expected following the merger; (5) the regulatory approvals required for
the merger may not be obtained on the proposed terms or on the anticipated
schedule; (6) the failure of SunTrust's and Wachovia's stockholders to approve
the merger; (7) competitive pressures among depository and other financial
institutions may increase significantly and may 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 results to differ materially from those described in the forward-looking
statements can be found in SunTrust'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 website
(www.sec.gov). All subsequent written and oral forward-looking statements
concerning the proposed transaction or other matters attributable to SunTrust or
any person acting on its behalf are expressly qualified in their entirety by the
cautionary statements above. SunTrust does 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. On May 14, 2001,
SunTrust filed with the SEC a preliminary proxy statement for solicitation of
proxies from Wachovia stockholders in connection with the Wachovia 2001 annual
meeting of stockholders. Subject to future developments, SunTrust intends to
file with the SEC a registration statement at a date or dates subsequent hereto
to register the SunTrust shares to be issued in the proposed transaction.
Investors and security holders are urged to read the proxy statement and
registration statement (when available) and any other relevant documents filed
with the SEC, as well as any amendments or supplements to those documents,
because they contain (or will contain) important information. Investors and
security holders may obtain a free copy of the proxy statement and the
registration statement (when available) and other relevant documents at the
SEC's Internet site. The proxy statement, the registration statement (when
available) and such other documents may also be obtained free of charge from
SunTrust by directing such request to: SunTrust, 303 Peachtree Street, N.E.,
Atlanta, GA 30308, Attention: Gary Peacock (404-658-4753). SunTrust, its
directors and executive officers and certain other persons may be deemed to be
"participants" in SunTrust's solicitation of proxies from Wachovia stockholders.
A detailed list of the names, affiliations and interests of the participants in
the solicitation is contained in SunTrust's preliminary proxy statement on
Schedule 14A, filed with the SEC on May 14, 2001.