The Bass Group May Try to Buy Great American

The Robert M. Bass Group, owner of American Savings Bank of Stockton, has joined the handful of investors known to be considering offers to buy troubled Great American Bank.

Sources said the Bass Group is “taking a look” at buying Great American, the savings and loan that last week said it faces a possible seizure by regulators unless it can find a buyer or raise $350 million in capital by the end of this year.

If the Bass Group acquires Great American, it may merge it with American Savings, a combination that would create the largest statewide savings-and-loan network in California with 307 statewide branches. “You’d have the Bank of America of S&Ls;,” one source said.

A Bass spokesman in New York declined to comment. A spokesman for Great American, which with $15.9 billion in assets is the nation’s eighth largest S&L;, said it is not its policy to comment on possible mergers. American Savings now operates 176 branches in the state; 131 of Great American’s 211 branches are in California.

Stricken with a growing pile of bad real estate loans in Arizona and California, Great American last week announced that it incurred 1989 losses totaling $263.4 million and that its so-called tangible capital had decreased to $85.9 million, about one-third of the minimum required by regulators for a thrift its size.

To avoid a possible seizure, Great American said its options are either to shrink assets drastically, raise $350 million in outside capital or sell itself to another bank or S&L.; Industry analysts said a merger is Great American’s best option because its chances of raising the outside capital or successfully reducing assets are slim.

Although declining to identify them, Great American said last week that it was in discussions with a number of interested investors. Wells Fargo and Security Pacific have both admitted being interested, and Bank of America and Citicorp have been mentioned by sources as also considering a bid.

The Bass Group acquired American Savings on Dec. 28, 1988, the same day that it was seized by regulators. Under management of chairman Mario J. Antoci, the S&L; has since become hugely profitable, thanks in part to the government’s agreement to split the operation into American Savings, a “good bank” with $16.3 billion in assets, and New West Savings, a “bad bank” charged with liquidating American’s nonperforming assets, which now total $9.5 billion.

Existing shareholders and bondholders in American Savings’ parent company, Financial Corp. of America, were wiped out as a result of the complicated seizure-acquisition transaction.

The Robert M. Bass Group is wholly owned by Ft. Worth investor Robert M. Bass and his immediate family. In addition to owning American Savings, Bass and his associates are majority investors in Bell & Howell, BT Cable, Anchor Media, and a number of other companies.

The Bass Group also considered an offer for Huntington Beach-based Mercury Savings, the $2.1-billion, 24-branch thrift that was placed in conservatorship by regulators in February, sources said. A group led by Robert Bass also holds a minority interest in the company that publishes the St. Petersburg Times newspaper and is attempting to increase its stake.

Great American stock closed down $.125 at $2.625 in New York Stock Exchange trading Tuesday.

Times staff writer James Granelli in Orange County contributed to this article.