Golden West Turns Its Eyes to Ford’s S&L; : Thrifts: The move represents the latest effort to expand World Savings. Overtures toward CalFed have been rebuffed.
With its pursuit of California Federal Bank apparently stalled, Oakland-based Golden West Financial has turned its attention across San Francisco Bay to the headquarters of First Nationwide Savings, the troubled savings and loan subsidiary of Ford Motor Co.
Sources confirmed that Golden West, whose operating arm is World Savings, is one of several financial institutions now examining First Nationwide’s books as a prelude to a possible offer for the San Francisco-based financial institution.
Officials at Golden West, First Nationwide and CalFed all declined to comment, but the talks were confirmed by officials close to the financial institutions.
The move represents the latest effort by Golden West Chairman Herb Sandler to expand the highly successful World Savings, one of the only major thrifts to emerge largely unscathed from the S&L; disaster of the 1980s.
It is also another move in what has become a chess match between Sandler and CalFed Chief Executive Edward Harshfield. While Sandler’s overtures to the Los Angeles-based thrift so far have been rebuffed, few observers think he has given up.
In December, Golden West made a $630-million offer to buy CalFed in a highly conditional package that included a cash payment to common stockholders of $21.50 a share, minus losses and write-downs of bad loans. CalFed’s board rejected the offer.
Financially troubled CalFed, the nation’s fifth-largest thrift, then announced a strategy to raise up to $300 million in stock offerings, followed by the possible sale of the thrift.
Sandler took his case directly to CalFed’s major shareholders, arguing that they might be better off taking Golden West’s offer now than risking continued losses that would deplete shareholders equity.
CalFed’s Harshfield countered by saying the money raised from the proposed stock offerings would enable the company to dispose of its bad loans while keeping its capital above minimum levels. Harshfield said the cleanup, followed by a possible sale, could be accomplished in six months or less.
Time is important because most of CalFed’s large investors are former bondholders who converted their holdings to stock as part of a reorganization and are now anxious to realize their profits. Those investors paid as little as $3 a share. CalFed’s stock closed Thursday at 14.375, off 12.5 cents, in trading on the New York Stock Exchange.
With the ball now in Golden West’s court, Sandler has several options. One is to forget CalFed completely and pursue First Nationwide; another is pursue both at the same time. Another is to get CalFed shareholders to sign so-called lockup agreements committing their shares to Sandler at certain terms for a specified period.
