EXHIBIT 99.1
[LETTERHEAD OF H. F. AHMANSON & COMPANY] NEWS
FOR IMMEDIATE RELEASE CONTACTS:
- --------------------- --------
MEDIA: MARY TRIGG
(818) 814-7922
INVESTOR: STEVE SWARTZ
(818) 814-7986
H. F. AHMANSON & COMPANY PROPOSES $6 BILLION MERGER WITH
GREAT WESTERN FINANCIAL CORPORATION TO FORM ONE OF THE TOP
TEN FINANCIAL INSTITUTIONS IN THE COUNTRY
-- MERGER TRANSACTION VALUED AT $42.53 PER GREAT WESTERN COMMON SHARE --
-- COMBINATION WOULD ESTABLISH MAJOR FINANCIAL SERVICES
HEADQUARTERS IN GREATER LOS ANGELES --
IRWINDALE, CA, FEBRUARY 18, 1997 -- H. F. Ahmanson & Company (NYSE:AHM) today
announced it has proposed a merger transaction between Ahmanson and Great
Western Financial Corporation (NYSE:GWF) that would create one of the nation's
leading and most competitive financial institutions. The combined entity, which
would have total assets of approximately $93 billion, would be headquartered in
Greater Los Angeles, enhancing the region's position as a major financial
center.
Under the terms of the merger proposal, Great Western's shareholders would
receive in a tax-free exchange 1.05 common shares of Ahmanson for each common
share of Great Western. Based on the closing price of Ahmanson's stock on
February 14, 1997, the exchange ratio would produce a value of $42.53 for each
Great Western common share. This provides Great Western shareholders with an
initial premium of 24.2% over Great Western's closing market price on February
14, 1997, the last full day of trading in Great Western's common shares.
Furthermore, this value represents a multiple of 2.7 times Great Western's
tangible book value, as of December 31, 1996.
The transaction would be accounted for as a purchase, and is subject to approval
by both Ahmanson's and Great Western's shareholders, and regulatory approvals.
Charles R. Rinehart, Chairman and Chief Executive Officer of Ahmanson, stated,
"This transaction is a win for the shareholders of both Great Western and
Ahmanson, a win for both companies' customers and a win for the Greater Los
Angeles community. Shareholders of the merged company will have an investment
with attractive long-term potential. By merging our companies, we will be
better positioned to provide enhanced services and conveniences to our
existing and potential customers. And as a national leader in the financial
services industry, we will offer greater career opportunities for employees."
In addition to potential revenue enhancements, annual pre-tax costs savings
resulting from the merger are anticipated to exceed $400 million by 1999.
Assuming a closing by September 30, 1997, the cost savings, when coupled with
planned stock repurchases stemming from the projected generation of
approximately $2 billion in excess capital by the end of 1999, would result in
immediate and substantial accretion in cash earnings per share, estimated to
equal 5% in 1997; 15% in 1998; and 26% in 1999. Furthermore, the transaction
would be accretive to reported earnings per share by the end of the fourth
quarter of 1998, and 9% accretive in 1999.
The combined company would benefit considerably from the enhanced market
presence it would gain through the merger. It would rank a strong third in the
entire California marketplace, holding a 13% market share in total deposits, and
a number one, two or three ranking in each of California's five largest
Metropolitan Statistical Areas (MSAs) and in eight of California's ten largest
MSAs. The state's five largest MSAs account for approximately 62% of the state's
total population and deposits, and the top ten MSAs account for approximately
80% of both the state's total population and deposits.
While the combination is expected to result in a consolidation of approximately
25% of the branches in the combined system, each organization's customers will
have access to at least 150 branches more than they do today, as well as the
convenience of more ATMs.
Mr. Rinehart said, "Ahmanson is committed to achieving this proposed merger. It
is a unique opportunity for both Ahmanson and Great Western to advance the best
interests of their constituencies and the communities both organizations serve."
Ahmanson stated that, in addition to all other applicable regulatory approvals,
it will shortly file under Hart-Scott-Rodino a notice of its intention to
acquire Great Western shares with a value in excess of $15 million, and will
seek early termination of the waiting period.
Ahmanson also reported that it is proposing a resolution and amendments to Great
Western's By-laws. Ahmanson stated that the shareholder resolution is designed
to provide shareholders of Great Western an opportunity to send the clear
message to Great Western's Board of Directors that they support the Ahmanson
merger proposal and, unless a bona fide and concrete proposal clearly providing
value greater than the Ahmanson merger proposal is received, that they want the
Great Western Board to take such actions as are necessary to permit the Ahmanson
proposal to proceed. The proposed Great Western By-law amendments are intended
to maximize shareholder value by ensuring that the Ahmanson merger proposal is
dealt with fairly and in accordance with sound principles of corporate
governance and that the Great Western Board respects
the views of its shareholders. In addition, Ahmanson said that it will undertake
a consent solicitation of Great Western shareholders for similar purposes.
Ahmanson furthermore reported that it is nominating three individuals
independent of Ahmanson to serve as directors of Great Western. These
individuals, if elected, have committed to seek to convince the other Great
Western directors to pursue merger proposals with a view to maximizing Great
Western's shareholder value. In particular, they would seek to convince the
other Great Western directors to consider the Ahmanson merger proposal and all
other proposals to merge with Great Western and, subject to their fiduciary
duties, actively pursue the proposal that they conclude maximizes value for
Great Western shareholders. The nominees are Lawrence A. Del Santo, Chairman and
Chief Executive Officer of the Vons Companies, Inc.; Robert T. Gelber, former
partner of the law firm of Gibson, Dunn & Crutcher; and Wolfgang Schoellkopf,
former Vice Chairman and Chief Financial Officer of First Fidelity
Bancorporation.
Attached is the letter proposing the merger of Ahmanson and Great Western sent
by Mr. Rinehart to the Great Western Board of Directors.
H. F. Ahmanson & Company is the parent company of Home Savings of America, which
is one of the nation's largest full service consumer banks. Home Savings serves
more than 1.7 million customers from 391 financial service centers in four
states and 114 mortgage lending offices in nine states.
THIS PRESS RELEASE CONTAINS CERTAIN FORWARD LOOKING STATEMENTS WITH
RESPECT TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF
AHMANSON AND, ASSUMING THE CONSUMMATION OF THE PROPOSED MERGER, A COMBINED
AHMANSON/GREAT WESTERN FINANCIAL CORPORATION, INCLUDING STATEMENTS RELATING TO:
(A) THE COST SAVINGS AND ACCRETION TO CASH EARNINGS AND REPORTED EARNINGS THAT
WILL BE REALIZED FROM THE PROPOSED MERGER; (B) THE IMPACT ON REVENUES OF THE
PROPOSED MERGER, INCLUDING THE POTENTIAL FOR ENHANCED REVENUES AND THE IMPACT ON
REVENUES OF CONSOLIDATION OF RETAIL BRANCHES AND OTHER OPERATIONS AS PLANNED;
(C) AHMANSON'S STOCK PURCHASE PROGRAM; AND (D) THE RESTRUCTURING CHARGES
EXPECTED TO BE INCURRED IN CONNECTION WITH THE PROPOSED MERGER. THESE FORWARD
LOOKING STATEMENTS INVOLVE CERTAIN RISKS AND UNCERTAINTIES. FACTORS THAT MAY
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH
FORWARD LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE FOLLOWING POSSIBILITIES:
(1) EXPECTED COST SAVINGS FROM THE PROPOSED MERGER CANNOT BE FULLY REALIZED OR
REALIZED WITHIN THE EXPECTED TIME FRAME; (2) REVENUES FOLLOWING THE PROPOSED
MERGER ARE LOWER THAN EXPECTED; (3) COMPETITIVE PRESSURE AMONG DEPOSITORY
INSTITUTIONS INCREASES SIGNIFICANTLY; (4) COSTS OR DIFFICULTIES RELATED TO THE
INTEGRATION OF THE BUSINESSES OF AHMANSON AND GWF ARE GREATER THAN EXPECTED; (5)
CHANGES IN THE INTEREST RATE ENVIRONMENT REDUCE INTEREST MARGINS; (6) GENERAL
ECONOMIC CONDITIONS, EITHER NATIONALLY OR IN THE STATES IN WHICH THE COMBINED
COMPANY WILL BE DOING BUSINESS, ARE LESS FAVORABLE THAN EXPECTED; OR (7)
LEGISLATION OR REGULATORY CHANGES ADVERSELY AFFECT THE BUSINESSES IN WHICH THE
COMBINED COMPANY WOULD BE ENGAGED. FURTHER INFORMATION ON OTHER FACTORS WHICH
COULD AFFECT THE FINANCIAL RESULTS OF AHMANSON AFTER THE PROPOSED MERGER IS
INCLUDED IN FILINGS BY AHMANSON WITH THE SECURITIES AND EXCHANGE
COMMISSION, (THE "COMMISSION"), INCLUDING A REGISTRATION STATEMENT ON FORM S-4
FILED WITH THE COMMISSION ON FEBRUARY 18, 1997, AND THE COMMISSION FILINGS
INCORPORATED BY REFERENCE THEREIN.
SHARES OF GREAT WESTERN CORPORATION ("GWF")
COMMON STOCK HELD BY H.F. AHMANSON & COMPANY
("AHMANSON"), ITS DIRECTORS AND EXECUTIVE OFFICERS
AND CERTAIN EMPLOYEES, OTHER REPRESENTATIVES OF AHMANSON
AND CERTAIN OTHER PERSONS WHO MAY SOLICIT PROXIES OR
CONSENTS, AND CERTAIN TRANSACTIONS BETWEEN ANY
OF THEM AND GWF
Ahmanson and certain other persons named below may solicit proxies (a) to
elect three nominees and one or more alternate nominees (the "Nominees") as
directors of GWF at the annual meeting of stockholders of GWF to be held on
April 22, 1997 (the "Annual Meeting") and (b) in favor of the adoption at the
Annual Meeting of a non-binding stockholder resolution and seven proposals to
amend the By-laws of GWF. Ahmanson and certain other persons named below may
also solicit consents from stockholders of GWF to approve proposals, without a
stockholders' meeting, to adopt a non-binding resolution of stockholders and an
amendment to the By-laws of GWF. The participants in this solicitation may
include Ahmanson; the directors of Ahmanson (Byron Allumbaugh, Harold A. Black,
Richard M. Bressler, David R. Carpenter, Phillip D. Matthews, Richard L. Nolan,
Delia M. Reyes, Charles R. Rinehart, Frank M. Sanchez, Elizabeth A. Sanders,
Arthur W. Schmutz, William D. Shulte, and Bruce G. Willison); the following
executive officers and employees of Ahmanson or its subsidiaries: Kevin M.
Twomey (Senior Executive Vice President and Chief Financial Officer), Anne-Drue
M. Anderson (Executive Vice President and Treasurer), Madeleine A. Kleiner
(Senior Executive Vice President and General Counsel), Stephen Swartz (Senior
Vice President and Director of Investor Relations), Eric Warmstein (Senior Vice
President and Director of Corporate Development), Mary Trigg (Senior Vice
President and Director of Public Relations), Linda McCall (Senior Vice President
and Director of Corporate Taxes), Adrian Rodriguez (Vice President of Public
Relations), Samantha Davies (Vice President of Public Relations), Peter Bennett
(Assistant Vice President of Public Relations), Barbara Timmer (Senior Vice
President and Director of Government and Legislative Affairs), and Tim Glassett
(First Vice President and Assistant General Counsel); and the following
Nominees: Lawrence A. Del Santo, Robert T. Gelber, Wolfgang Schoellkopf, Hugh M.
Grant and John E. Merow.
As of the date of this communication, Ahmanson is the beneficial owner of
100 shares of GWF Common Stock. Other than Mr. Gelber, who owns 332 shares of
GWF Common Stock, none of the Nominees is the beneficial owner of any GWF Common
Stock.
Other than set forth herein, as of the date of this communication, neither
Ahmanson nor any of its directors, executive officers or other representatives
or employees of Ahmanson, any Nominees or other persons known to Ahmanson, who
may solicit proxies has any security holdings in GWF. Ahmanson disclaims
beneficial ownership of any securities of GWF held by any pension plan or other
employee benefit plan of Ahmanson or by any affiliate of Ahmanson. Ahmanson
further disclaims beneficial ownership of any securities of GWF held by Ahmanson
or any of its subsidiaries for the benefit of third parties or in customer or
fiduciary accounts in the ordinary course of business.
Although Credit Suisse First Boston Corporation ("CSFB") and Montgomery
Securities ("Montgomery"), financial advisors to Ahmanson, do not admit that
they or any of their directors, officers, employees or affiliates are a
"participant," as defined in Schedule 14A promulgated under the Securities
Exchange Act of 1934 by the Securities and Exchange Commission, or that such
Schedule 14A requires the disclosure of certain information concerning CSFB or
Montgomery, CSFB and Montgomery may assist Ahmanson in such a solicitation. Each
of CSFB and Montgomery engages in a full range of investment banking, securities
trading, market-making and brokerage services for institutional and individual
clients. In the normal course of their respective businesses, each of CSFB and
Montgomery may trade securities of GWF for their own account and the account of
their customers and, accordingly, may at any time hold a long or short position
in such securities. As of the most recent practicable date prior to the date
hereof as such information was available, CSFB holds a net 24 shares of GWF
common stock and Montgomery does not hold any shares of GWF common stock.
Except as disclosed above, to the knowledge of Ahmanson, none of Ahmanson,
the directors or executive officers of Ahmanson, the employees or other
representatives of Ahmanson or the Nominees named above has any interest,
direct or indirect, by security holdings or otherwise, in GWF.
[LETTERHEAD OF H. F. AHMANSON & COMPANY]
February 17, 1997
Board of Directors
of Great Western Financial Corporation
c/o Mr. John F. Maher
President & Chief Executive Officer
Great Western Financial Corporation
9200 Oakdale Avenue
Chatsworth, CA 91311
Dear John:
H. F. Ahmanson & Company and Great Western Financial Corporation have an
historic opportunity to combine our organizations and provide our respective
shareholders, customers and communities with extraordinary and unparalleled
benefits. The forces reshaping the financial services landscape demand that we
act now on this opportunity.
Accordingly, we propose a merger transaction between Ahmanson and Great
Western which will create one of the nation's leading, largest and most
competitive financial institutions, well-positioned to meet the needs of our
customers and to achieve greater profitability than either organization would be
able to realize on its own. As you know, securities analysts and investors have
publicly recognized the compelling logic of a combination of our companies.
Together, we will also be able to capitalize on our rich heritage of service to
our communities and customers, and help solidify Los Angeles' standing as one of
the world's leading financial centers. The transaction we propose is a win for
our respective shareholders, a win for our customers, a win for our
organizations, and a win for the Los Angeles community.
Under the terms of our proposal, each share of Great Western would be
converted into 1.05 shares of Ahmanson. Based on the closing price for Ahmanson
stock on February 14, 1997, this exchange ratio would produce a value of $42.53
for each Great Western share. That value represents a 24.2% initial premium over
Great Western's current market price and a multiple of 2.7 times Great Western's
tangible book value as of December 31, 1996. The transaction would be tax-free
to Great Western's shareholders and would be accounted for as a purchase.
Moreover, the initial premium for Great Western's shareholders represents
only a portion of the extraordinary value that they will receive. A combination
of Ahmanson
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and Great Western would produce far greater earnings than the sum of the two
companies' earnings if they remain separate. Without even considering potential
revenue enhancements, cost savings alone should produce over $400 million in
incremental pre-tax earnings per year. Ahmanson's earnings momentum should
further enhance the future profitability of the combined company. Great
Western's shareholders, who would own almost 60% of the combined company, would
gain the benefit of these higher earnings. In short, no other transaction could
produce so much value for both of our shareholders because of our shared
geographic, strategic, product and operational focus.
We and our financial advisors, Credit Suisse First Boston Corporation and
Montgomery Securities, are confident that the market will evaluate the
transaction on a cash earnings per share basis. The market has fully accepted
Wells Fargo's use of cash earnings per share as the proper standard for
evaluating its merger with First Interstate, and a number of major bank holding
companies now provide cash earnings per share information to investors. As you
know, there is no true economic difference created by accounting for a
transaction as a purchase or a pooling, and a purchase affords considerably
greater flexibility in terms of future capital management. (For example, we
could increase our dividend or use the cash to repurchase additional shares.) We
believe that the proposed merger will be accretive to cash earnings per share by
approximately 15% in 1998 and 26% in 1999, and that even on a reported earnings
per share basis, the merger will be accretive by about 9% in 1999.
We also believe that a merger of our two companies presents a unique
opportunity because of our compatible business strategies. A strategic business
combination of Ahmanson and Great Western will both facilitate the
implementation of our strategy and accelerate the returns which that strategy
can produce.
The strategy business combination we propose also offers unique value for
our communities. As a major banking institution headquartered in Los Angeles
County, we can bring enormous benefits to our home market in terms of jobs,
community programs, capital investment, civic participation and overall prestige
and economic well-being. Los Angeles' standing as a financial center has been
jeopardized by the recent acquisitions of its two largest banks; by combining,
we can fill that void. Conversely, if either or both our institutions sold to an
out-of-state acquiror, it is likely to have a significantly adverse impact on
the Los Angeles area.
The strategic combination of our two companies would position us to achieve
enhanced service to all our communities. As you know, Ahmanson has achieved an
"Outstanding" CRA rating, and we are committed to strive to achieve that rating
for the combined organization. Our combined companies will be able to develop
new and expanded programs so that our communities will participate in the
benefits of our combination.
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[LOGO OF H. F. AHMANSON & COMPANY]
By combining our companies, we will be far better positioned to provide
enhanced services to our existing and potential customers. We will have the
resources, the customer base and expertise to participate fully in the
technological revolution which is reshaping the financial services industry. We
will be better able to reposition our company to offer a more complete range of
financial services. As one of the leading financial institutions in the country,
we will be able to offer enhanced career opportunities for our employees. At the
same time, an objective of the highest priority will be sensitivity to and an
effort to minimize employee dislocation. We will immediately curtail new hiring
in order to maximize the number of positions available for existing employees of
both of our companies. We hope that you will take a similar action. We would
then seek to work with you to develop further programs to combine our
organizations in a manner that is as seamless and minimally disruptive as
possible to employees.
We would hope that our proposed merger would bring together the very best
of our cultures, our people and our programs. In that connection, we would hope
that a number of your directors will serve on the board of the combined company
and that certain of your executives would continue to serve on our combined
management team.
We are convinced that the proposed transaction will obtain expeditious
regulatory approval. The combined institution will be financially sound, a
stronger competitor and fully committed to serve its communities.
In closing, I want to emphasize how enthusiastic the entire Board of
Ahmanson and I are about this proposal to combine Ahmanson and Great Western. We
have a unique and compelling opportunity to advance the best interests of our
shareholders, employees, communities and customers. Given the changing financial
services environment, we all know time is of the essence for both our companies.
We urge you and your Board to work with us to achieve that result.
Very truly yours,
H. F. Ahmanson & Company
By: /s/ CHARLES R. RINEHART
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Charles R. Rinehart
Chairman of the Board
& Chief Executive Officer
cc: James F. Montgomery
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