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Ahmanson buys thrift
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October 6, 1997: 7:56 a.m. ET
Company to expand California presence with $901 million deal
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NEW YORK (CNNfn) - H.F. Ahmanson & Co. is buying small rival Coast Savings Financial Inc. for about $901 million, or $46.17 a share, plus certificates representing any cash awards from lawsuits against the U.S. government.
The deal will give Coast shareholders rights to any penalties the thrift wins in lawsuits filed against the government over "supervisory goodwill" rule changes in the 1980s. Those penalties collections could bolster the value of Ahmanson's offer, which is lower than Coast's current stock price of $54.
Each Coast share will be swapped for .8082 of an Ahmanson share. Ahmanson will treat the deal as a purchase to allow additional stock buyback.
Coast has about $9 billion in assets and Ahmanson has roughly $48 billion.
Acquisition of Coast would give Ahmanson about a 9 percent share of California deposits, up from the current 7.5 percent. It would rank Ahmanson equally with Washington Mutual for the No. 3 spot among California banks behind BankAmerica Corp. and Wells Fargo & Co.
In June, Ahmanson gave up on its plan for a $6.7 billion merger with Great Western Financial Corp. The deal would have made it the nation's largest thrift.
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