Great Western Financial Corp. wants Friday, June 13, to be the day of reckoning for determining its future owner, but H.F. Ahmanson & Co. is fighting for more time.
Great Western, Chatsworth, Calif., Tuesday scheduled a shareholder vote on a bid, accepted by management, from Washington Mutual Inc. for June 13- at a special meeting to be held four hours before its annual meeting.
But the move was immediately challenged in Delaware Chancery Court by Ahmanson, the Irwindale, Calif., thrift company that has been trying to break up the agreement between the two companies for more than two months.
Ahmanson wants the Washington Mutual merger offer to be voted on at least six weeks after the June 13 annual meeting, at which Ahmanson hopes to elect three directors. Ahmanson believes the delay is needed to give its three directors, if elected, a chance to get their message across to others on Great Western's board.
Ahmanson launched a hostile offer for Great Western Feb. 17, sending Great Western into the friendly arms of Seattle-based Washington Mutual.
Lawyers from both sides said they did not know when the Delaware judge, Jack B. Jacobs, would schedule a hearing on the meeting question.
But Ahmanson said it believes the judge indicated this week that Great Western might be hard-pressed to convince him that the vote should be held June 13.
Monday, Judge Jacobs wrote in a letter to the litigating parties that he would not hear any argument from Great Western that "the expense and delay of postponing an already noticed special meeting is an 'equity' that should weigh against any grant of injunctive relief."
The judge wrote that the "risk" that the special meeting could be postponed is "the inevitable consequence of Great Western's own litigating position."
Ahmanson sources said they took this to mean that, since Great Western had for months in the wake of Ahmanson's hostile offer been delaying its annual meeting, it would now be difficult for Great Western to argue against the delay of its special shareholders meeting.
Great Western lawyers could not be reached to comment on Judge Jacobs' letter.
Whatever happens on that question, Ahmanson is proceeding with its tender offer, announced Monday. The thrift filed its registration materials with the Securities and Exchange Commission Tuesday and hopes to have approval within several weeks and then begin the exchange.
"This is not a way to beat a merger vote on Wamu, but it's designed so that if they turn down the Wamu merger there is a ready means to get a deal with us," said an Ahmanson source. The offer period would likely last about 20 days, according to the source.
Ahmanson also hopes that, if the holders of a majority of Great Western shares do not support the Washington Mutual deal but agree to exchange their shares for Ahmanson's, Great Western would deactivate its so-called poison pill.
The poison pill is designed to protect Great Western from just this sort of situation. It is triggered once at least 15% of Great Western's outstanding shares have been acquired by an unwanted suitor, causing the immediate issuance of such a quantity of additional shares as to make an acquisition prohibitively expensive.
Meanwhile in Seattle, Washington Mutual hosted a full-day investor conference Tuesday attended by about 150 institutional investors and analysts, according to one analyst's estimate. Several of Great Western's top brass, including A. William Schenck, vice chairman, and chief financial officer Carl F. Geuther, were on hand to answer questions.
"They are parading them around together here, showing people that they are a team," said the analyst.