With a stunning, $6 billion bid for Great Western Financial Corp., H.F. Ahmanson & Co. raised the curtain on what industry observers say could be a prolonged takeover drama of uncertain outcome.

Put in play by an unsolicited offer that escalated in value by 11% during Tuesday's stock-price run-up, Great Western is expected to attract at least one other suitor to a contest reminiscent of Wells Fargo & Co.'s $11 billion acquisition last year of First Interstate Bancorp.

First Bank System Inc. of Minneapolis, the company Wells Fargo bested in the First Interstate battle, could return to the California fray.

But analysts viewed Seattle-based Washington Mutual Inc., a company in the same size range and with the same thrift heritage as Ahmanson and Great Western, as an even more likely pursuer.

And even if Ahmanson succeeds at snaring Great Western, probably at a higher price than the initial bid of $42.53 per share, the combined entity could itself become a more attractive acquisition target.

At its current $50 billion of assets, Ahmanson ranks fourth among California-based financial institutions. With Great Western, which also has a Southern California headquarters, it would climb into third, at $93 billion of assets and a 13% share of the state's deposits.

"If you're thinking about being in the state, you're going to have to pick up the pace and look at these things," said Gareth Planck, analyst with UBS Securities in San Francisco.

The offer-at 2.7 times book value and a 24% premium above Great Western's closing stock price last Friday-was rich but perhaps not enough to scare away all comers, analysts said.

"There's a very good chance that the ending price will be higher," said Chad Yonker, analyst with Fox Pitt Kelton. "A lot of companies would like to own (Ahmanson), so I think we'll see some others entering the fray."

Topping the list is $45 billion-asset Washington Mutual, which, unlike other potential out-of-state acquirers, already has a strong California presence. Chief executive officer Kerry Killinger has said Washington Mutual wants to significantly expand in the state.

The $36 billion-asset First Bank System could draw on its white knight experience, having made its run at First Interstate shortly after Wells Fargo's hostile salvo of October 1995.

Norwest Corp., also of Minneapolis, and NationsBank Corp. of Charlotte, N.C. are viewed as more remote possibilities.

"I wouldn't say that we are anticipating it, but we did talk a lot about people that might be interested in California," said Charles R. Rinehart, chief executive of Ahmanson, when asked about a possible rival bidder.

If that happens, we'll certainly be ready to deal with it," Mr. Rinehart added. "The primary issue, though, is that nobody else can match the expense savings that we can with our two headquarters sitting side by side."

As Mr. Rinehart spelled out in a letter to Great Western CEO John F. Maher on Monday, he expects annual pretax cost reductions of $400 million by 1999.

Ahmanson's Home Savings of America and its competitor's Great Western Bank, the two largest thrifts in the country, have the bulk of their retail operations in California and Florida, allowing for an estimated 25% consolidation of branches and back office operations, Mr. Rinehart said.

After the merger, the new company would have about 600 branches in the two states.

Such overlap would translate into significant layoffs, approaching 2,500 in the retail operations alone, analysts estimated. Mr. Rinehart said it was too early to estimate job losses but Ahmanson would treat Great Western's employees "much more sympathetically" than Wells did First Interstate's.

Ahmanson chose the increasingly popular purchase form of accounting for the proposed deal, as opposed to a pooling of interests. Wells also went this route, which allows flexibility in subsequent management of capital, namely through stock buybacks.

Purchase accounting would also leave a mountain of goodwill to be written off-Ahmanson said an acquisition of Great Western would add $3.9 billion of goodwill, bringing total on its books to more than $4.3 billion.

But given Wall Street's acceptance of Wells Fargo's emphasis on cash flow versus reported earnings, the purchase form made sense, Mr. Rinehart said. With stock repurchases, the deal would lead to immediate accretion in cash earnings per share, he said, of about 5% in 1997, 15% in 1998, and 26% by 1999.

Based on reported earnings per share, the deal would not have been accretive until the fourth quarter of 1998, he said.

An investment banking source estimated the deal would be 3% dilutive to shareholder value on a reported basis for 1998 and 9% accretive in 1999. But on a cash basis, he said, the deal would be 15% accretive in 1998 and 26% accretive in 1999.

Although Ahmanson and Great Western have held off-and-on talks for years, Mr. Rinehart probably took Mr. Maher by surprise when he called about his intentions Monday night. Mr. Rinehart said he had not spoken to Mr. Maher for a year or so.

"I think there was some initial surprise that it was us and that this was really happening," Mr. Rinehart said.

Mr. Maher could not be reached for comment. Great Western released a statement saying it will respond once it has reviewed the offer with its board and advisers.

Mr. Rinehart said he chose not to seek a "friendly" dialogue because he preferred to "jump-start the process." Though stressing he still seeks a negotiated agreement, he said an unsolicited offer serves "to get everybody focused right away. It makes it clear that we are serious, not just philosophizing."

Mr. Rinehart said he moved now in part because Great Western was about to make some major investments in mortgage origination technology and consumer product lines-both of which Ahmanson already has in place.

Ahmanson also has its senior management team fully in place, assuring it could continue to operate smoothly during a time-consuming merger process, the CEO said. He estimated the deal could close by Sept. 30.

With a combined $11 billion of mortgages originated in 1996, the post- merger Ahmanson would have ranked 10th in the country. That kind of brawn would help it compete against other megalenders in California, especially Bank of America, Countrywide Credit Industries, and Wells Fargo & Co., industry analysts said.

The merged entity would rank seventh in mortgage-loan servicing, with a $109 billion portfolio, providing economies of scale not available in the separate portfolios.

Major thrifts have slipped down in the ranks of originations and servicing because of the rapid expansion of mortgage companies, with support from the secondary market. Also, adjustable-rate mortgages, a thrift specialty, have been out of favor in recent years because of relatively low interest rates.

Angelo Mozilo, chairman of Countrywide Home Loans, Pasadena, Calif., said he was not surprised by Ahmanson's move.

"It makes them a more formidable competitor, particularly in California, where we often go head to head," Mr. Mozilo said. (Countrywide is the nation's second-largest mortgage lender, after Norwest Mortgage Inc.)

To clear a legal obstacle, Ahmanson filed a suit in Delaware Chancery Court challenging Great Western's anti-takeover, or poison pill, provisions that would dilute the company's outstanding shares go into effect once an acquirer buys 15% or more of its stock. Among other things, the suit challenges a so-called dead hand provision, which allows only a serving director to dismantle any aspects of the poison pill.

Ahmanson also submitted three director candidates for Great Western's shareholder meeting, scheduled for April 22. To be elected to the 11-member board, a director need receive only the most votes cast, not a majority. Four directors in all will be up for reelection.

At the annual meeting, Ahmanson plans to propose up to seven bylaw changes that it said would remove other obstacles. For example, one provision currently allows Great Western to expand its board at will, so if three of the management's director nominees are defeated, management could, in effect, reappoint them.

Great Western's legal defenses-mainly staggered board terms and a poison pill-are not air-tight, legal experts said. For example, shareholders are not prohibited from acting by written consent, which means that they do not need to wait for a shareholder meeting to act on a takeover or other proposal.

One indication that it means business is that Ahmanson hired the same team to manage its hostile overture that led Wells Fargo & Co.'s approach to First Interstate.

Like Wells, Ahmanson is being represented by investment bankers J. Richard Fredericks of Montgomery Securities in San Francisco, and Michael Martin of CS First Boston, New York; and by legal counsel H. Rodgin Cohen of Sullivan & Cromwell, New York.

Great Western retained investment bankers Merrill Lynch and Goldman Sachs and law firm Skadden Arps.

Sources close to the deal are calling it a clone of the Wells transaction, noting that Ahmanson proposes an all-stock deal with a fixed exchange ratio that would be accounted for as a purchase.

Both companies' shares ended New York Stock Exchange trading Tuesday at $44.875: Great Western was up $10.625, Ahmanson $4.375.

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