With no resolution in sight to H.F. Ahmanson & Co.'s 10-week-long hostile quest for Great Western Financial, the war of words is getting louder and uglier.
The latest salvo came in a newspaper ad this week that put Great Western's spin on the proxy battle over how to consider competing bids from Ahmanson and white knight Washington Mutual Inc.
"When the events of the past few months are over-and one day they will be-our company and our directors will still have their self-respect," proclaimed Great Western chief executive John Maher. His open letter to Ahmanson directors left unsaid, but just barely, that they wouldn't have that comfort.
The ad, which accused Ahmanson of double-counting 5.2 million shares in the proxy battle, spotlighted the pivotal role of the public relations campaign in this bitter contest between once civil competitors.
Using techniques perfected to sell soap and political candidates, the adversaries have peddled their different visions for Great Western not so much on the strengths of their business plans, it often seems, as on less tangible issues of charisma and fair play.
Each side has used negative ads to tar the other. Between them, they have easily spent more than $1 million on advertising in The Wall Street Journal, Los Angeles Times, and The New York Times - as well as in the American Banker.
The contenders have each hired high-powered New York media consultants- the same ones, it so happens, who squared off during Wells Fargo & Co.'s contest with First Bank System Inc. to buy First Interstate Bancorp, Los Angeles.
And investment advisers to the two camps have aggressively leaked story ideas to the press in hopes of putting their foes on the defensive.
"What's surprising to me is how much this has taken on the tone of a political campaign," Ahmanson's chairman, Charles R. Rinehart, said recently. "This is no longer just a business deal. It's a battle of the press releases."
The political analogy is apt in many ways because investors appear to view the contest for the Chatsworth, Calif., thrift company, in part, as a CEO election: Mr. Rinehart, the architect of a 1990s strategy of diversifying Ahmanson out of home loans, versus Kerry K. Killinger, the savvy Washington Mutual CEO who is worshiped on Wall Street for his merger successes.
Aided by the Abernathy/MacGregor Group Inc., Great Western (defending its agreement to merge with Washington Mutual) has painted an unflattering portrait of Ahmanson and, by extension, Mr. Rinehart, as behind the times and almost incompetent.
Ahmanson has responded with a few shots at the Killinger mystique, arguing that there's more style than substance to his claim that Washington Mutual can make its bid pay off by hiking up revenues. Ahmanson's own offer rests on cutting costs by axing overlapping branches and staff.
For the most part, though, Ahmanson has hammered away at Great Western's unwillingness to negotiate by suggesting that the target's senior executives and board of directors are so determined to resist the hostile offer that they are riding roughshod over the true interests of shareholders.
Ahmanson's media adviser has been Kekst & Co., New York, which represented First Interstate in its defense against Wells' hostile bid.
Of course, none of this brand differentiation-in Madison Avenue parlance-comes cheap. But hey, who's counting?
Companies are willing to spend big money to show they mean business, said Jonathan Rinehart, chairman of Powell & Tate's New York office, and no relation of Charles Rinehart. (Powell & Tate is not involved in this public relations battle.)
"You're in a control context, and people are swinging from the socks," Mr. Rinehart said. "People are generally prepared to spend what it takes."
The battle for Great Western has been a made-for-p-r saga since Day 1. Analysts and investors woke up to the details of Ahmanson's surprise bid in the Feb. 18 Wall Street Journal. The Los Angeles Times carried a letter from Mr. Rinehart to Los Angeles customers, touting the bid as a "historic opportunity."
But almost immediately Mr. Rinehart stumbled. In an internal memo and newspaper interviews, he promised Ahmanson employees that none of them would be laid off in the merger. To Great Western, the message was clear- its staff would be gutted if Ahmanson succeeded.
Mr. Maher, Great Western's CEO, responded with a letter to his employees denouncing Mr. Rinehart's business ethics as "highly repugnant."
Meanwhile, Ahmanson launched an ethics attack of its own after Great Western decided to postpone indefinitely its annual meeting. It accused Great Western of violating the rights of its shareholders. Ahmanson had planned to nominate a slate of directors at the meeting, which was originally scheduled for April 22.
With the Washington Mutual agreement under its belt, Great Western began ads that implicitly attacked Mr. Rinehart's capacity to run Ahmanson, suggesting that if he couldn't run his $50 billion-asset company he surely couldn't run the merged thrifts with double the assets.
One ad turned Mr. Rinehart's own words against him. Citing an unusually candid presentation he made to security analysts last year, Great Western crowed: "Who said Ahmanson's bank is low-tech and marginally efficient, with a lack of broad product knowledge?"
The answer: "Ahmanson CEO Charles R. Rinehart, that's who!"
Market watchers still can't say who'll win this merger war. But one thing is for sure. The latest juicy details will be coming soon to the ad pages of a newspaper near you.