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EXHIBIT 10
Goldman, Sachs & Co. / 85 Broad Street / New York, New York 10004
Tel: 212-902-1000 / Fax: 212-357-4449
[GOLDMAN SACHS LOGO]
PERSONAL AND CONFIDENTIAL
May 19, 1997
Board of Directors
Great Western Financial Corporation
9200 Oakdale Avenue
Chatsworth, California 91311
Gentlemen and Madame:
You have requested our opinion as to the fairness to the holders of the
outstanding shares of Common Stock, par value $1.00 per share (the "Shares"), of
Great Western Financial Corporation (the "Company") of the exchange ratio of 0.9
shares of Common Stock, no par value, of Washington Mutual, Inc. ("Washington
Mutual") to be received for each Share (the "Exchange Ratio") pursuant to the
merger (the "Merger") contemplated by the Agreement and Plan of Merger dated as
of March 5, 1997 by and among Washington Mutual, New American Capital, Inc. and
the Company (the "Agreement").
Goldman, Sachs & Co., as part of its investment banking business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, competitive
biddings, secondary distributions of listed and unlisted securities, private
placements and valuations for estate, corporate and other purposes. We are
familiar with the Company having provided certain investment banking services to
the Company from time to time, including having acted as managing underwriter of
its $300 million issue of Capital Securities in January 1997, and having acted
as its financial advisor in connection with, and participated in certain of the
negotiations leading to, the Agreement. We also have provided certain investment
banking services to Washington Mutual from time to time and may provide
investment banking services to Washington Mutual in the future. In addition,
Goldman, Sachs & Co. is a full service securities firm and in the course of its
trading activities it may from time to time effect transactions, for its own
account or the account of customers, and hold positions in securities or options
on securities of the Company and Washington Mutual.
In connection with this opinion, we have reviewed, among other things, the
Agreement; the Registration Statement on Form S-4 of Washington Mutual dated
March 13, 1997 as amended through May 13, 1997, including the Joint Proxy
Statement/Prospectus of Washington Mutual and the Company; Annual Reports to
Stockholders and Annual Reports on Form 10-K of the Company for the five years
ended December 31, 1996; Annual Reports to Stockholders and Annual Reports on
Form 10-K of Washington Mutual for the three years ended December 31, 1996;
Annual Reports to Stockholders and Annual Reports to the FDIC on Form F-2 of
Washington Mutual Savings Bank, predecessor to Washington Mutual, for the two
years ended December 31, 1993; certain interim reports to stockholders and
Quarterly Reports on Form 10-Q of the Company and Washington Mutual; certain
other communications from the Company and Washington Mutual to their respective
stockholders; certain internal financial analyses and forecasts for the Company
and Washington Mutual prepared by their respective managements, including
analyses and forecasts of certain cost savings,
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Great Western Financial Corporation
May 19, 1997
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operating efficiencies, revenue effects and financial synergies (collectively,
the "Synergies"); the S-4 Registration Statement dated February 18, 1997, as
amended through May 13, 1997, of H.F. Ahmanson & Company ("Ahmanson"), including
the merger proposal and the subsequently proposed exchange offer to the
Company's stockholders referred to therein (the "Ahmanson Exchange Offer
Proposal"); and certain press releases and filings with the Securities and
Exchange Commission by the Company, Washington Mutual and Ahmanson in connection
with the Merger, the Ahmanson proposals and related matters. We also have held
discussions with members of the senior managements of the Company and Washington
Mutual regarding the past and current business operations, financial condition
and future prospects of their respective companies and each senior management's
assessment of the future prospects of the combined company. In addition, we have
reviewed the reported price and trading activity for the Shares and Washington
Mutual Common Stock, compared certain financial and stock market information for
the Company and Washington Mutual with similar information for certain other
companies the securities of which are publicly traded, reviewed the financial
terms of certain recent business combinations in the savings and loan industry
specifically and in other industries generally and performed such other studies
and analyses as we considered appropriate.
We have relied without independent verification upon the accuracy and
completeness of all of the financial and other information reviewed by us for
purposes of this opinion. In that regard, we have assumed, with your consent,
that the financial forecasts, including, without limitation, the Synergies and
projections regarding under-performing and non-performing assets and net
charge-offs have been reasonably prepared on a basis reflecting the best
currently available judgments and estimates of the Company and Washington Mutual
and that such forecasts will be realized in the amounts and at the times
contemplated thereby. We are not experts in the evaluation of loan and lease
portfolios for purposes of assessing the adequacy of the allowances for losses
with respect thereto and have assumed, with your consent, that such allowances
for each of the Company and Washington Mutual are in the aggregate adequate to
cover all such losses. In addition, we have not reviewed individual credit files
nor have we made an independent evaluation or appraisal of the assets and
liabilities of the Company or Washington Mutual or any of their subsidiaries and
we have not been furnished with any such evaluation or appraisal. We also have
assumed, with your consent, that the Merger will be accounted for as a pooling
of interests under generally accepted accounting principles. Our advisory
services and the opinion expressed herein are provided for the information and
assistance of the Board of Directors of the Company in connection with its
consideration of the transaction contemplated by the Agreement and does not
constitute a recommendation to any stockholder of the Company as to how such
stockholder should vote at the stockholders' meeting to be held in connection
with the Merger, nor does this opinion constitute a recommendation as to how
stockholders should respond to the Ahmanson Exchange Offer Proposal.
Based upon and subject to the foregoing and based upon such other matters
as we consider relevant, it is our opinion that as of the date hereof the
Exchange Ratio pursuant to the Agreement is fair to the holders of Shares.
Very truly yours,
/s/ GOLDMAN, SACHS & CO.
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GOLDMAN, SACHS & CO.
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