SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant {X}
Filed by a Party other than the Registrant {_}
Check the appropriate box:
{_} Preliminary Proxy Statement
{_} Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
{_} Definitive Proxy Statement
{X} Definitive Additional Materials
{ } Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
GREAT WESTERN FINANCIAL CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
{X} No fee required.
{_} Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined): ___
(4) Proposed maximum aggregate value of transactions: _______________
(5) Total fee paid.
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{_} Fee paid previously with preliminary materials.
{_} Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: __________________________________________
(2) Form, Schedule or Registration Statement No.: ____________________
(3) Filing Party: ____________________________________________________
(4) Date Filed: ______________________________________________________
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[Washington Mutual Logo] [Great Western Logo]
WASHINGTON MUTUAL, INC.
MERGER WITH
GREAT WESTERN FINANCIAL CORPORATION
THE EXECUTIVE SUMMARY*
ISS MEETING
MAY 22, 1997
* The following is an executive summary of certain more detailed
information contained in Great Western Financial Corporation's
Current Report on Form 8-K (the "Form 8-K") filed with the
Securities and Exchange Commission on May 22, 1997. For further
information concerning certain matters described herein see the
Form 8-K.
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The WAMU Transaction Is the Best For GWF Shareholders
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o Creates immediate as well as ongoing value for GWF
shareholders
o Creates a premier consumer banking franchise
o Represents the low risk execution alternative for GWF
shareholders
o Ahmanson Proposal utilizes questionable assumptions and
relies on imprudent leverage
o Compared to Ahmanson, WAMU has a proven track record of
successfully integrating large acquisitions and delivering
shareholder value
o The pro forma combined GWF/WAMU is financially superior to a
combined GWF/Ahmanson
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[Washington Mutual Logo] [Great Western Logo]
Creates Immediate As Well As Ongoing Value for GWF Shareholders
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o Highly accretive to earnings per share -- 56% projected
1999E accretion per GWF share
o Earnings growth improved above what GWF shareholders could
expect on a stand-alone basis -- 32% 1997E-1999E forecasted
EPS growth
o Capital ratios remain strong as excessive leverage is not
required to produce attractive financial returns -- pro
forma tangible common ratio is projected to be in excess of
5%
o Significant growth in net interest income driven by high
projected loan originations at reasonable margins
o WAMU has a consistent record of regular dividend increases -
- 29% average annual increase since 1991
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[Washington Mutual Logo] [Great Western Logo]
Creates a Premier Consumer Banking Franchise
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o Will rank in top three in deposit market share in
California, Washington and Oregon and 5th in Florida
o Number one-ranked originator of single family mortgage loans
on a combined basis in California, Washington and Oregon
o WAMU's proven consumer banking capabilities have produced
cumulative average growth rates since 1993 of 7% in consumer
loans, 52% in depositor fee income, 23% in retail checking
accounts and 10% in total households served. These
capabilities will be applied to GWF's customer base
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[Washington Mutual Logo] [Great Western Logo]
Represents the Low Risk Execution Alternative For GWF
Shareholders
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o The WAMU management team has worked together for a
significant number of years and has considerably greater
experience integrating large acquisitions as compared to
Ahmanson's management team
o GWF's systems are compatible with WAMU's, not with
Ahmanson's
o WAMU will continue to use the GWF name in California,
benefiting customer retention
o WAMU is a friendly transaction in which integration planning
has already begun. Ahmanson is a hostile offer that has
antagonized employees
o A faster solution to the situation is better for
shareholders, employees and customers. WAMU is on track for
a closing in late June or early July
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[Washington Mutual Logo] [Great Western Logo]
AHM Proposal Utilizes Questionable Assumptions and Relies On
Imprudent Leverage
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o Ahmanson's projected cost savings are $114 million or 34%
greater than WAMU's, a difference that cannot be supported
by Ahmanson's proposed 100 additional branch closures
o Ahmanson's earnings are significantly more sensitive to
achieving the stated cost savings target than are WAMU's
o Ahmanson made significant changes in its operating
assumptions when it increased its bid; absent these changes
the transaction is dilutive in 1999
o Ahmanson's EPS forecasts depend on massive share repurchases
that leave little room for error -- share repurchases plus
dividends are projected to equal 178% of net income through
1999
o Massive share repurchases will result in Ahmanson continuing
to have one of the lowest consolidated tangible common
equity ratios in the industry -- pro forma ranking of 92 out
of 93 thrifts
o Ahmanson's intangibles will total 58% of total equity and
the amortization expense will be in excess of 25% of net
income available to common stock in 1998
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[Washington Mutual Logo] [Great Western Logo]
Compared To Ahmanson, WAMU Has a Proven Track Record Of
Successfully Integrating Large Acquisitions and Delivering
Shareholder Value
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o WAMU has consistently produced greater returns to
shareholders -- ten year total return: 24% vs. 9%
o WAMU has consistently maintained stronger asset quality and
reserve coverage ratios -- NPA-to-assets: 0.93% vs. 2.06;
Reserves-to-NPLs: 110% vs. 50%
o WAMU has delivered superior growth in earnings per share and
dividends per share -- annual dividend growth: 29% vs. 0%
o WAMU has a more attractive mix of loans and deposits and is
geographically more diversified -- consumer loans: 10% vs
3%; transaction + money market + savings accounts: 42% vs.
32%
o WAMU's loan originations have been growing while Ahmanson's
have been declining -- 1994 to 1996 originations: 46%
increase vs. 47% decrease
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[Washington Mutual Logo] [Great Western Logo]
The Pro Forma Combined GWF/WAMU Is Superior To a Combined
GWF/Ahmanson
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o GWF shareholders, for each GWF share, will receive greater
earnings and book value in a WAMU transaction than in an
Ahmanson transaction
o A combination with WAMU will produce higher growth rates in
EPS and book value than a combination with Ahmanson which
should result in higher valuation multiples
o Return on assets and equity are materially higher in a
combination with WAMU
o Capital, asset quality and reserve coverage ratios are
significantly stronger in a combination with WAMU
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[Washington Mutual Logo] [Great Western Logo]
The Pro Forma Combined GWF/WAMU Is Superior To a Combined
GWF/Ahmanson
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WAMU Ahmanson
Transaction Proposal
----------- --------
EPS
---
1999E Accretion to GWF Shareholder 56% 39%
1997E-1999E Growth 32% 20%
Capital
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12/31/97E Tangible Common 4.91% 3.46%
Equity Ratio and projected and projected
to increase to be flat
12/31/97E Tangible Book $19.28 $12.22
Value per GWF Share
Returns
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1999E Return on Assets 1.35% .98%
1999E Return on Common 23.1% 11.7%
Equity
Asset Quality
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NPAs/Assets @ 3/31/97 0.94% 1.35%
Reserves/NPLs @ 3/31/97 119% 83%
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[Washington Mutual Logo] [Great Western Logo]
GWF Per Share Deal Value -- WAMU & Ahmanson
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[Graph with two lines, one solid line for WAMU Transaction and
one dotted line for Ahmanson Proposal]
[Horizontal line: dates (2/18/97 - 5/19/97); Vertical line: Per
GWF Share Deal Value (0.00 - 60.00)]
WAMU Ahmanson
Date Transaction Proposal
---- ----------- --------
2/18/97 50.63 47.12
3/03/97 46.69 43.71
3/14/97 45.34 42.26
3/27/97 44.61 44.85
4/10/97 42.98 45.00
4/23/97 42.08 43.95
5/06/97 47.42 48.90
5/19/97 50.29 49.80
[Graphics: arrow pointing to Ahmanson Proposal line at
coordinate (02/18/97, 47.12) with text box: 02/18/97 Ahmanson
launches a hostile bid for GWF at an exchange ratio of 1.05x;
arrow pointing to WAMU Transaction line at coordinate (03/06/97,
47.70) with text box: 03/06/97 WAMU announces merger agreement
with GWF at an exchange ratio of 0.9x; arrow pointing to Ahmanson
Proposal line at coordinate (03/17/97, 47.70) with text box:
03/17/97 Ahmanson increases exchange ratio to collar (1.2x -
1.1x)]
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[Washington Mutual Logo] [Great Western Logo]
Exchange Ratio Analysis -- Ahmanson Proposal
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[Graph appears here. Horizontal line: Ahmanson Stock Price
($37.00 - $50.00); Vertical line: Offer Value Per GWF Share
($44.00 - 56.00); To the right of vertical line appears a
subtitle: 1.20x Exchange Ratio; followed by a vertical line:
$41.67; followed by a subtitle: 1.20 to 1.10x Exchange Ratio $50
Offer; followed by a vertical line: $45.45; followed by a
subtitle: 1.10x Exchange Ratio; Diagonal line from coordinates
(37.00, 44.40) to (41.67, 50.00) becoming a horizontal line from
coordinates (41.67, 50.00) to (45.45, 50.00) becoming a diagonal
line from coordinates (45.45, 50.00) to (50.00, 55.00); graphic:
arrow with text: Current Ahmanson Price pointing to coordinate
(40.875, 49.05) with dashed vertical and horizontal lines from
that coordinate to the horizontal and vertical axes of the
graph.]
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[Washington Mutual Logo] [Great Western Logo]
Comparison of Upside Potential
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WAMU Transaction Ahmanson Proposal
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Change In Exchange Implied Value Exchange Implied Value WAMU
Stock Price Price Ratio Per GWF Share Price Ratio Per GWF Share Superiority
----------- ----- ----- ------------- ----- -------- ------------- -----------
Current (a) $55.56 .9x $50.01 $40.88 1.20x $49.05 $0.96
5% Appreciation 58.34 .9 52.51 42.92 1.16 50.00 2.51
10% Appreciation 61.12 .9 55.01 44.96 1.11 50.00 5.01
15% Appreciation 63.90 .9 57.51 47.01 1.10 51.71 5.80
(a) As of May 20, 1997.
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[Washington Mutual Logo] [Great Western Logo]