Analysts are increasingly convinced that H.F. Ahmanson & Co. is marking time until a potentially lucrative sale to its rival in the bidding war for Great Western Financial Corp.

Washington Mutual Inc. is seen as likely to take over Ahmanson, a move that would enable it to challenge Wells Fargo & Co. and BankAmerica Corp. for dominance in the state.

"I believe the gravitational forces pulling Ahmanson into Washington Mutual's maw are near irresistible," said analyst Jonathan Gray of Sanford C. Bernstein.

Buying Ahmanson would be the quickest way for Washington Mutual to challenge the dominance of California's No. 1 and No. 2 players, Charlotte A. Chamberlain of Jefferies & Co. said in a recent report.

Analysts said a recent three-day spurt of insider sales at Ahmanson shows how much its appeal to Washington Mutual has grown as a result of the bidding war.

On July 14, 15 and 16, all but one of Ahmanson's top executives sold shares-about 123,000 in all- at prices that ranged from $46.81 to $49.81. Before it went after Great Western, Ahmanson's stock had hovered at around $40.

Chairman Charles A. Rinehart got $2.35 million on July 14 for 50,000 shares-7% of his total share and options holdings, rather more than the $2 million he would have garnered just before the bid.

Analysts attributed the gain in share price to Mr. Rinehart's arguments during the bidding war that Ahmanson offered great cost savings if its overlap with Great Western's franchise could be eliminated.

If, as many analysts believe, Washington Mutual does acquire Ahmanson, Mr. Rinehart will have played a crucial catalytic role in California's thrift consolidation.

By arguing for the cost savings, however, Ahmanson "basically waved the red flag in Wamu's face: 'If you take us over these savings are yours,'" Ms. Chamberlain says.

Mr. Gray, who has advocated a combination of Great Western and Ahmanson for years, estimates Wamu could afford to pay up to $64 per Ahmanson share, and that a deal could happen as early as next year. That would be a premium of about 28% to Wednesday's closing price of $50.125.

"We're all aware of the speculation and the analysts' reports," Ahmanson spokeswoman Mary Trigg said Wednesday. "However, my understanding is that they (the management) are operating this business for the long term. We see enormous opportunity in the California market."

Ahmanson's senior management chose to sell a chunk of stock last month because they had been constrained from doing so for 18 months by confidential knowledge of pending deals, Ms. Trigg said.

Of course, Washington Mutual isn't the only possible contender for Ahmanson. Analysts haven't given up on the prospect that an out-of-state bank, such as Norwest, NationsBank, U.S. Bancorp, or Banc One might want the thrift for its 7% share of California's deposits.

"Out-of-state banks are going to have to take a look at Ahmanson, because there just isn't a lot left," said Smith Barney analyst Thomas O'Donnell.

"I think they want to stay independent. as long as they can, because the scarcity value is going to push takeover prices upward," Mr. O'Donnell said.

His advice for Ahmanson's management: "Buy back the stock (and) don't do anything stupid on the acquisition front." That, along with California's recovery and Ahmanson's diversification out of home loans, will ensure that Ahmanson will be a takeover target, Mr. O'Donnell said.

Ahmanson has had good news on the earnings front. Its second-quarter earnings per share of $1.01 were more than double a year ago, thanks to lower credit costs, greater efficiencies, and an aggressive stock buyback program.

Ms. Trigg says Ahmanson sees "tremendous potential" to build its checking account and consumer loan business by picking off the customers Great Western loses as it is integrated into Washington Mutual.

Washington Mutual has said it will close about 100 Great Western branches. In many cases, those branches will be next door or across the street from Ahmanson's branches, Ms. Trigg says.

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