Amidst California's merger-obsessed thrifts, Golden West Financial Corp. has long marched to its own drummer. It has stubbornly stuck to the low-margin mortgage business and spurned most new technologies, even ATMs.
The architects of this strategy, husband-and-wife CEO team Herb and Marion Sandler, show no sign of leaving though both are well into their 60s.
But some say the $6 billion hostile bid H.F. Ahmanson & Co. made for Great Western Financial Corp. last week may finally put the Oakland-based parent of World Savings and Loan Association in play.
One scenario, suggested by analyst Thomas O'Donnell of Smith Barney Inc., has an Ahmanson-Great Western merger forcing Golden West and Washington Mutual Inc. into each other's arms.
For one thing, Mr. O'Donnell noted, Washington Mutual has shown it isn't afraid of buying a mortgage-oriented thrift. The Seattle-based company made its first foray into California late last year, announcing it would purchase $20.4 billion-asset American Savings Bank of Irvine.
In addition, Golden West is reasonably priced, Mr. O'Donnell said. At Friday's close it was trading at $71.75, about 1.75 times book value. Great Western, by contrast, is trading at about three times book.
Essentially, the case for Golden West rests on the scarcity of large financial institutions in California that are available for sale. With Bank of America, Wells Fargo, and the Japanese-owned Unionbancal Corp. and Sanwa Bank California out of the running, the big thrifts are the most likely acquisition candidates.
Of these, Ahmanson, Great Western, and Golden West have between $37 and $50 billion in assets, and the next tier of likely thrift targets is significantly smaller. Coast Savings Financial Inc. had $8.7 billion of assets at the end of 1996, and Glendale Savings Bank had $15.1 billion.
So, if it doesn't enter the Great Western bidding, or fails to win, then the acquisition of Golden West could give Washington Mutual the heft to "even come back and look at Ahmanson and Great Western," Mr. O'Donnell said.
"No matter how things shape up, I think if two of these companies hook up-whatever their combination happens to be-I think you might see the other two forced to look at each other," he added.
Still, not everyone thinks Golden West would be a good catch.
Campbell Chaney, an analyst with Sandler O'Neill & Partners, says the company's technological outmodedness makes a deal pricey, because the buyer would have to invest heavily in branch upgrades.
Others believe that Golden West's aging customer base of savers isn't especially desirable to a bank or banklike thrift.
Like Washington Mutual, Golden West is included on the short list of potential white knights for Great Western. But longtime observers of the thrift scene say the Sandlers, who pride themselves on running the leanest shop in the business, would take as sharp a knife as Ahmanson would to the high costs at Great Western.
Norwest Corp. and NationsBank Corp. also have been mentioned as possible white knights, though there are some who doubt the North Carolina bank is ready to absorb another institution in the wake of its Boatmen's takeover.
