H.F. Ahmanson & Co. has escalated its battle for Great Western Financial Corp. with a new filing designed to plant doubts about its rival's accounting plans.

The Irwindale, Calif., thrift, which made a hostile bid for Great Western on Feb. 18, wants Great Western's planned merger with Washington Mutual Inc. halted on the grounds that it cannot be accounted for as a pooling of interests as the would-be partners intend.

According to an amendment to Ahmanson's lawsuit filed Friday in Delaware Chancery Court, Great Western issued 833% more stock options for executives in 1996 than in 1995. Ahmanson claimed that the Chatsworth, Calif., thrift changed the terms of its executives' options last December so they could exercise the options if Great Western was purchased by Washington Mutual.

This is evidence that Great Western was contemplating a merger before Ahmanson made its bid and demonstrates that Great Western's stock options are "tainted," said a source close to Ahmanson. When options are deemed tainted, the related stock cannot be used in a pooling transaction.

A ruling in Ahmanson's favor would clearly complicate Washington Mutual's white-knight bid, which hinges on the ability to use pooling of interest accounting.

In a pooling of interest, the balance sheets of the partners are combined, meaning the acquirer need not subtract goodwill-which represents premium paid over book value-from future earnings.

A similar issue arose when First Bank System Inc. tried to rescue First Interstate Bancorp from a hostile bid by Wells Fargo & Co.

In the First Interstate case, the Securities and Exchange Commission imposed severe restrictions on First Bank's buyback program, saying the buyback improperly boosted the value of the stock, and could not be used in a pooling transaction with First Interstate.

Great Western spokesman Ian Campbell dismissed Ahmanson's charges as "sheer nonsense."

He said Great Western's 1996 options figures are distorted because options that were to have been granted in December 1995 were not issued until January 1996. Options scheduled for December 1996 were granted when planned, Mr. Campbell said.

He said the terms of the options were changed "to better align them with other benefit plans" the company provides.

The options "would have triggered in the same fashion regardless if Washington Mutual or someone else offered to us," he said.

Some outside experts said they thought Ahmanson's latest ploy smacked of desperation.

"The issues in their complaint are a bit 'leading edge,'," said Ronald H. Janis, an attorney who has advised on numerous bank mergers. "I don't think this is going anywhere."

But even if these moves fail to halt the merger on their own, in the long-run they could help Ahmanson's cause.

Investment bankers said the moves by Ahmanson's legal team, led by H. Rodgin Cohen of Sullivan & Cromwell, are designed to plant questions in the minds of Great Western investors.

"At this stage of the game, if Cohen can sow some doubt about Washington Mutual's ability to do the deal, he's done his job," one investment banker said.

And that could help Ahmanson. Trading of Great Western stock has been very heavy in recent days, an indication that long-term investors may be cashing in. People close to Ahmanson say arbitragers have been aggressively buying Great Western stock.

That's to Ahmanson's advantage because these new, short-term investors are likely to vote mainly for the bank they believe can best complete the deal at a good price.

A person close the Ahmanson camp pointed out that Ahmanson's current bid offers investors a 6.4% premium over market price, while Washington Mutual's bid provides a premium of only 2.5%.

"Arbitragers have nothing to lose by buying Great Western," the source said. "So are they? Yeah."

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