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Great Western rejects bid
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May 20, 1997: 12:56 p.m. ET
Bank's board nixes Ahmanson bid in favor of Washington Mutual offer
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NEW YORK (CNNfn) - Great Western Financial Corp. said Tuesday that its board has rejected H.F. Ahmanson & Co.'s $6.87 billion takeover bid, reaffirming its commitment to Washington Mutual Inc.'s roughly $6.94 billion friendly offer.
Great Western's board, by unanimous vote of those directors present, recommended that stockholders reject Ahmanson's proposal and not tender their shares to Ahmanson, parent of banking giant Home Savings of America.
Ahmanson has offered investors up to 1.2 of its shares for each Great Western share held.
By contrast, Great Western's board has already accepted Washington Mutual's offer of 0.9 Washington Mutual shares for each Great Western share outstanding.
Based on closing stock prices Monday, Washington Mutual's offer slightly beats Ahmanson's.
However, Ahmanson spokeswoman Mary Trigg said that for all but four days of the past two months, favorable stock prices have meant Ahmanson's bid actually surpasses Washington Mutual's.
"That is why, despite the Great Western board's consistent stance of not wanting to talk with Ahmanson, we want to go directly to shareholders (through a planned tender offer)," she said.
Ahmanson intends to launch a tender offer for Great Western as soon as the company receives U.S. Securities and Exchange Commission procedural approval for such a move.
Meanwhile, Ahmanson has also been trying to delay a shareholder vote on Washington Mutual's bid.
The company wants the Great Western board to consider the two offers only after the election of new board members at Great Western's June 13 annual stockholders' meeting.
At the gathering, Ahmanson plans to seek election of three pro-Ahmanson directors to the board.
Still, Great Western said Tuesday that its board has reaffirmed its backing of Washington Mutual's bid.
"In sharp contrast to Ahmanson's unsolicited proposal, our merger with Washington Mutual makes compelling economic and strategic sense for Great Western stockholders," Great Western, a Chatsworth, Calif.-based bank-holding company, said in a statement.
"We remain strongly committed to our merger with Washington Mutual and look forward to the June 13 stockholder vote," the company said.
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