99.2
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H.F. AHMANSON & CO.
ENHANCED MERGER PROPOSAL FOR
GREAT WESTERN FINANCIAL
MARCH 17, 1997
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THIS PRESENTATION AND THE ACCOMPANYING SLIDES CONTAIN 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 GREAT WESTERN FINANCIAL CORPORATION 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,
("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. AHMANSON BELIEVES THAT THE INFORMATION REGARDING THE PROPOSED
WASHINGTON MUTUAL/GREAT WESTERN MERGER IS SUBJECT TO SIMILAR QUALIFICATIONS AND
UNCERTAINTIES. ALTHOUGH THIS PRESENTATION INCLUDES INFORMATION CONCERNING
WASHINGTON MUTUAL AND GREAT WESTERN INSOFAR AS IT IS KNOWN OR REASONABLY
AVAILABLE TO AHMANSON, AHMANSON DOES NOT HAVE ACCESS TO THE BOOKS AND RECORDS OF
EITHER COMPANY. THEREFORE, INFORMATION CONCERNING GREAT WESTERN AND WASHINGTON
MUTUAL THAT HAS NOT BEEN MADE PUBLIC IS NOT AVAILABLE TO AHMANSON. CONSEQUENTLY,
WITH RESPECT TO WASHINGTON MUTUAL, GREAT WESTERN AND THEIR PROPOSED MERGER,
AHMANSON HAS RELIED ENTIRELY ON PUBLICLY AVAILABLE INFORMATION WITHOUT
INDEPENDENT VERIFICATION. MOREOVER, AHMANSON NOTES THAT THE NEED TO RELY SOLELY
ON SUCH PUBLICLY AVAILABLE INFORMATION MAY AFFECT THE JUDGMENTS UNDERLYING AN
EVALUATION OF THE FINANCIAL AND OTHER PROJECTED INFORMATION DISCUSSED HEREIN.
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Exchange Ratio: . 1.20x when AHM stock price is below $41.67
. Floating to provide value of $50.00 to GWF stockholders when
AHM is between $41.67 and $45.45
. Exchange ratio of 1.10x when AHM is greater than $45.45
Determination of . The exchange ratio will be fixed based on the average AHM
Final Exchange stock price for the 20 trading days prior to receipt of
Ratio: OTS approval or through whatever mechanism is agreed upon
in a definitive agreement with GWF
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[GRAPH APPEARS HERE]
AHM GWF EXCHANGE
STOCK PRICE SHARE VALUE RATIO
============= ===================== ===================
$40.00 $48.00 1.200x
41.00 49.20 1.200
41.67 50.00 1.200
42.00 50.00 1.190
43.00 50.00 1.163
44.00 50.00 1.136
45.00 50.00 1.111
45.45 50.00 1.100
46.00 50.60 1.100
47.00 51.70 1.100
48.00 52.80 1.100
49.00 53.90 1.100
50.00 55.00 1.100
Current Value of AHM Offer: $48.30
Current Value of WAMU Offer: $45.34
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. Revised AHM and GWF standalone earnings estimates
. Cost savings increased by $50 million to $454 million
. GWF G&A base larger than original analysis
. Revenue enhancements of $50 million assumed
. Net interest income from consumer lending and business banking
. Fee income from retail deposits, cash management and investment sales
. Credit reserve decreased by $50 million to $100 million based on WAMU due
diligence and Great Western concurrence
. Restructuring reserve conservatively increased to $454 million (100% of cost
saves)
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Base Case /(1)/ Updated Case /(1)//(2)/
===================== ========================
AHM Stock Price $45.50 $40.25 $45.50 $40.25
Exchange Ratio 1.10x 1.20x 1.10x 1.20x
Reported EPS
1998E $3.08 $2.97 $3.26 $3.13
1999E 3.88 3.71 4.14 3.97
Cash EPS
1998E $4.04 $3.83 $4.21 $3.99
1999E 4.92 4.67 5.19 4.92
(1) Both cases adjusted. AHM and GWF standalone earnings models revised to
reflect current street estimates and information provided in WAMU
presentation and GWF 10-K. In addition, a $195 million pre-tax "break up"
fee has been added in addition to a $50 million reduction in the credit
reserve.
(2) Adjusted to reflect impact of $100 million in additional pre-tax synergies
by 1999 and higher restructuring reserve
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% Accretion (Dilution)
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Exchange
Ratio 1998 1999
================ ========================
Reported EPS
AHM = $40.25 1.20x (11)% 3%
AHM = $43.50 1.15 (9) 4
AHM = $45.50 1.10 (7) 7
Cash EPS
AHM = $40.25 1.20x 9% 22%
AHM = $43.50 1.15 12 25
AHM = $45.50 1.10 15 29
(1) Based on Updated Case
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AHM OFFER REMAINS PREDICATED ON A SIMPLE, PROVEN FORMULA:
SIGNIFICANT COST SAVINGS
[INSIDE GRAPHIC ARROW]
ENHANCED SHAREHOLDER VALUE:
=
+ 1. SIGNIFICANT ACCRETION
2. ACCELERATED EPS GROWTH
ACCELERATED STOCK REPURCHASE
[INSIDE GRAPHIC ARROW]
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IN ADDITION TO PROVIDING A $2.97 PER SHARE OR GREATER THAN $400 MILLION PREMIUM,
AHM'S OFFER IS CLEARLY SUPERIOR IN ALL OTHER IMPORTANT RESPECTS:
AHM Offer /(1)/ WAMU Offer
=================== =========================================
AHM AHM Original Revised Reasonable
Cash Basis $45.50 $40.25 Projections Projections Assumptions
========= ========= ============= ============= =============
Pro Forma EPS
1998E $4.21 $3.99 $4.81 $4.81 $4.42
1999E 5.19 4.92 5.71 5.89 5.13
Exchange Ratio 1.10x 1.20x 0.90x 0.90x 0.90x
==============================================================================
Pro Forma Cash EPS per GWF Shareholder
1998E $4.63 $4.79 $4.32 $4.32 $3.97
1999E 5.71 5.90 5.14 5.30 4.62
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(1) Based on revised "Updated Case".
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We have a singular opportunity to demonstrate stockholder support of the AHM
offer over the course of the next two weeks:
. Consent solicitation process provides opportunity for an early referendum on
our offer
. Process already under way and to be completed by the end of March
. Receipt of strong stockholder support for AHM consents should convince the
GWF Board of the need to fulfill its fiduciary obligations
. Existing WAMU contract allows GWF to enter into negotiations with AHM
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SHARES OF GREAT WESTERN FINANCIAL 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 a
date to be announced (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 are
also soliciting consents from stockholders of GWF to approve proposals, without
a stockholders' meeting, to adopt non-binding resolutions of stockholders and
amendments 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. Schulte, 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), Madeleine
A. Kleiner (Senior Executive Vice President, Chief Administrative Officer and
General Counsel), Anne-Drue M. Anderson (Executive Vice President and
Treasurer), Tim S. Glassett (First Vice President and Assistant General
Counsel), Linda McCall (Senior Vice President and Director of Corporate Taxes),
Stephen A. Swartz (Senior Vice President and Director of Investor Relations),
Barbara Timmer (Senior Vice President and Director of Government and Legislative
Affairs), Mary A. Trigg (Senior Vice President and Director of Public
Relations), Eric Warmstein (Senior Vice President and Director of Corporate
Development), Samantha Davies (Vice President of Public Relations), Adrian
Rodriguez (Vice President of Public Relations), and Peter Bennett (Assistant
Vice President of Public Relations); and the following Nominees: Lawrence A.
Del Santo, Robert T. Gelber, Wolfgang Schoellkopf, Hugh M. Grant and
John E. Merow.
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As of March 14, 1997, Ahmanson is the beneficial owner of 2,344,800 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 March 14, 1997, 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 March 12, 1997, CSFB held a net short position of
203,476 shares of GWF common stock and Montgomery held no 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 who may participate in this solicitation or the
Nominees named above has any interest, direct or indirect, by security holdings
or otherwise, in GWF.
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APPENDIX
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AHM GWF EXCHANGE
PRICE SHARE VALUE RATIO
============= ===================== ===================
$40.00 $48.00 1.200x
41.00 49.20 1.200
41.67 50.00 1.200
42.00 50.00 1.190
43.00 50.00 1.163
44.00 50.00 1.136
45.00 50.00 1.111
45.45 50.00 1.100
46.00 50.60 1.100
47.00 51.70 1.100
48.00 52.80 1.100
49.00 53.90 1.100
50.00 55.00 1.100
14