After two weeks without a response from Great Western Financial Corp., H.F. Ahmanson & Co. is taking its hostile merger bid directly to Great Western's shareholders.
Ahmanson said Monday it has begun a so-called consent solicitation, which entails seeking shareholder support for the merger, as well as for four amendments to Great Western's bylaws.
Great Western has "taken a series of actions that have delayed the ability of Great Western's stockholders to express their view on our proposal," the statement said.
Ian Campbell, a Great Western spokesman, would give no indication when or if the company would respond. "We're going to respond to their proposal in due course and in a deliberate manner, and the actions we have been taking are to ensure that there is no rush to judgment," Mr. Campbell said.
Most observers believe the thrift is holding out for a better offer or for a third-party bidder. Washington Mutual Inc. of Seattle is considered the most likely candidate.
Great Western has also indefinitely delayed its annual shareholders meeting, originally scheduled for April 22, and engaged in some legal skirmishing to ward off Ahmanson's hostile bid.
But legal experts said Great Western has a hole in its takeover defense. Its shareholders are not prohibited from acting on the bid by written consent.
In addition to seeking support for the takeover, Ahmanson wants shareholders to agree to place a $100 million cap on any breakup fee that Great Western might grant to attract a white knight bidder.
Ahmanson has retained MacKenzie Partners Inc. to conduct the consent solicitation, and Great Western has hired Georgeson & Co.-both veterans of the takeover battles of the 1980s.
Like most large financial services companies, a large percentage of Great Western's stock is held by institutional investors, with Wellington Management Co. and Vanguard/Windsor Funds Inc. controlling more than 12%. About 1.6% of the stock is held internally.
Any merger must be approved by the board, but the bylaw changes could be enacted if a majority of the stockholders voted in favor of Ahmanson's position.
Great Western had sought to block the consent solicitation last week with a lawsuit in Delaware Chancery Court. The court made no ruling, however, reserving judgment on its legality until after the process.
If the two Los Angeles-area thrifts do merge, it would create the 10th- largest financial services company in the country in deposits. It would also be the largest ever successful hostile takeover by a thrift, and possibly the first, observers said.
Some observers said it's possible that Ahmanson's bid-launched Feb. 17 and valued Monday at $43.71 for each Great Western share-might prove to be the winner.
"Banks today are very disciplined, which means that it's highly unlikely that a bank would take on something for strategic reasons that would hurt its shares," said Robert H. Smith, managing director of Smith & Crowley in Los Angeles and the former chief executive of Security Pacific Corp.