Friendly Suitor Says GW Deal Even Better Than It Thought
Washington Mutual Inc., criticized by rival thrift H.F. Ahmanson & Co. for allegedly inflating financial projections related to its proposed acquisition of Great Western Financial Corp., said Thursday that the merger would lead to even higher earnings than it previously estimated.
In its much-anticipated merger plans filed Thursday with the Securities and Exchange Commission, the Seattle-based company projected per-share earnings would rise to $5.90 in 1999, 15% higher than it estimated March 6 when the proposed merger was announced.
Washington Mutual also repeated its claim that a merger with Great Western would be likely to result in cost savings of $340 million in 1999--a figure that Ahmanson said earlier this week was at least $100 million too high. Some analysts also said the savings estimates appeared to be overly aggressive.
Among other factors it used to figure the savings, Washington Mutual said it and Great Western use the same technology systems to operate branch and other bank functions. By contrast, Washington Mutual said, Great Western and Ahmanson have very different computer systems.
Ahmanson, which made its unsolicited proposal for Great Western on Feb. 17, said late Thursday that it had not completed reviewing Washington Mutual’s filing.
However, spokeswoman Mary Trigg said, “I think we’ll be very interested to see if the numbers in the [document] are any more credible than when they made the announcement.”
Analysts, who were also awaiting Washington Mutual’s documents, did not have an immediate comment.
Washington Mutual’s stock dropped $1.625 to close at $51.625 on Nasdaq, while shares of Ahmanson declined 87.5 cents to close at $40.375 on the New York Stock Exchange. Great Western shares dropped $1.50 to close at $45.75 on the NYSE.
Based on Thursday’s closing prices and Great Western’s latest number of outstanding common shares of 142.37 million, Washington Mutual’s proposal for Great Western is worth $46.46 a share, or $6.615 billion. Ahmanson’s offer is valued at $42.39 a share, or $6.036 billion.
