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Battle for thrift heats up
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March 17, 1997: 9:35 p.m. ET
Ahmanson offers $400M more than Washington Mutual for Great Western
From Correspondent Casey Wian
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LOS ANGELES (CNNfn) - A heavyweight battle is going on in the thrift industry for control of Great Western Financial.
In one corner, fighting out of Irwindale, Ca., is H.F. Ahmanson, parent of the nation's largest thrift, Home Savings of America.
And in the other corner, from Seattle, comes Washington Mutual.
On Monday, Ahmanson raised its hostile takeover bid for Great Western to $6.7 billion, which equals $3 a share more than Washington Mutual's $6.3 billion deal.
During a conference call with Wall Street analysts, Ahmanson executives did the corporate equivalent of taking off the gloves.
"Our offer continues to be simple and based on a proven formula that's consistent with our own history," Kevin Twomey, chief financial officer at Ahmanson, said. "It's achievable, it's credible, it does not rely on hopes and prayers that unprecedented cost savings can be achieved at the same time as unprecedented revenue enhancements."
Washington Mutual responded by saying its revenue and savings projections are achievable, and vowed to press ahead with its current bid.
Great Western says it will study Ahmanson's higher offer, but still urged shareholders not to accept the deal.
"What I think is going to happen now is we're going to look at how the market looks at the two competing bids," Thomas O'Donnell, senior analyst at Smith Barney, said. "Ahmanson for Great Western, or Washington Mutual for Great Western." (109K WAV) or (109K AIFF)
Washington Mutual refused to rule out a higher offer.
The combination of either Ahmanson's Home Savings or Washington Mutual with Great Western would create the nation's largest savings institution, with assets of about $90 billion. All three are trying to beef up beyond their traditional business of mortgage lending.
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