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Wachovia Corp.'s directors rejected a hostile $13.7 billion takeover proposal from SunTrust Banks Inc., reaffirming plans to merge with Charlotte, N.C.-based First Union Corp. SunTrust, based in Atlanta, said it planned to challenge that decision in federal and state courts, arguing that public disclosures by Wachovia and First Union "are materially false and misleading in several important respects." The offer from SunTrust would have created the ninth-largest US bank holding company; First Union's $12.9 billion bid would create the fourth-largest. Wachovia, headquartered in Winston-Salem, N.C., and Atlanta, has more than 650 offices, mostly in Florida, Georgia, the Carolinas, and Virginia.

America Online announced plans to raise the cost of its primary Internet service by 9 percent - a move that could generate $500 million more a year in revenue. Beginning in July, three-quarters of AOL's 29 million customers who subscribe to its Unlimited Use plan will pay $23.90 a month, an increase of $1.95. AOL's other plans will remain the same, the company said.

The world's leading maker of paper for publishing and printing, Abitibi-Consolidated Inc. of Montreal, said it will take 180,000 tons of capacity offline by idling much of a mill in Kenora, Ontario. The move will involve the elimination of 147 jobs and the layoffs, at least until autumn, of 333 other workers.

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(c) Copyright 2001. The Christian Science Monitor

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