SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant {X}
Filed by a Party other than the Registrant {_}
Check the appropriate box:
{_} Preliminary Proxy Statement
{_} Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
{_} Definitive Proxy Statement
{X} Definitive Additional Materials
{ } Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
GREAT WESTERN FINANCIAL CORPORATION
-----------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
{X} No fee required.
{_} Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined): ___
(4) Proposed maximum aggregate value of transactions: ________________
(5) Total fee paid.
--------
{_} Fee paid previously with preliminary materials.
{_} Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: __________________________________________
(2) Form, Schedule or Registration Statement No.: ____________________
(3) Filing Party: ____________________________________________________
(4) Date Filed: ______________________________________________________
[LETTERHEAD OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP]
May 30, 1997
Mr. Peter R. Gleason
Senior Analyst
Institutional Shareholder Services
7200 Wisconsin Avenue, Suite 1001
Bethesda, Maryland 20814
Dear Mr. Gleason:
Much has transpired over the past three months
for Great Western Financial Corporation ("Great
Western"), Washington Mutual, Inc. ("Washington Mutual")
and H.F. Ahmanson & Company ("Ahmanson"). We realize
that, in connection with the consent and proxy
solicitations relating to the Great Western/Washington
Mutual merger and Ahmanson's unsolicited acquisition
proposal, you have received and reviewed a significant
amount of information. Most recently Ahmanson has
provided you with a lengthy letter, dated May 27, 1997,
setting forth Ahmanson's position regarding a variety of
issues. Great Western has reviewed Ahmanson's letter
and, needless to say, it disagrees with virtually all of
Ahmanson's assertions. However, at this juncture, with
the Great Western and Washington Mutual stockholder votes
on the merger scheduled to occur in two weeks, we are
writing, on behalf of Great Western, to make only the
following observations in response to Ahmanson's letter:
o Great Western Chose the Superior Merger.
Great Western has pursued a strategic
merger with Washington Mutual, and the
Great Western Board is absolutely
convinced that Washington Mutual is a
superior merger partner. In approving the
Great Western/Washington Mutual merger
agreement, the Great Western Board
concluded, among other things, that the
Washington Mutual merger proposal was not
only superior on an immediate-term value
basis but also, in the Board's opinion,
presented Great Western stockholders with
better long-term value prospects. Great
Western believes that:
o The Washington Mutual merger
creates a premier consumer
banking franchise.
o Washington Mutual, compared to
Ahmanson, has a proven track
record of delivering stockholder
value.
o A combined Great Western/Washington
Mutual is financially superior to a
combined Great Western/Ahmanson.
The benefits of the Washington Mutual
merger are discussed in the revised and
updated versions of the presentations
first provided to you on May 22, 1997
which are attached hereto.
o Analyst Reaction. Over the course of the
past few months, many analysts have
similarly espoused the merits of a Great
Western/Washington Mutual merger. We have
attached hereto for your review an
advertisement containing a sampling of
quotes from analysts.
o Current Value. The market has supported
the determination of the Great Western
Board. The current implied value of the
Washington Mutual merger has been higher
than that of Ahmanson's "enhanced"
proposal for each trading day since May
16.* Based on the closing market prices
of Washington Mutual common stock and
Ahmanson common stock on May 29, 1997, the
current implied value of the Washington
Mutual merger was $1.09 per share higher
than that of Ahmanson's "enhanced"
proposal, which represents approximately
$150 million in additional value for Great
Western stockholders.
--------------------
* The current implied value is determined by reference
to the respective closing prices of the Washington
Mutual common stock and the Ahmanson common stock
and, in the case of Ahmanson, is based on the
assumption that the average closing price of the
Ahmanson common stock for the applicable pricing
period equals the closing price on the date in
question.
o The Great Western Board is Overwhelmingly
Independent. Nine of Great Western's 11
directors are independent of Great
Western. Despite Ahmanson's repeated
assertions that the loans granted to Great
Western's directors under Great Western's
Employee Home Loan Program are somehow
relevant to the directors' independence,
the fact is that they are not -- the terms
of such loans will not be affected in any
manner by the identity of Great Western's
merger partner.
o The "Commitment" of the Great Western
Board. The Great Western Board is
committed to only one thing -- the best
interests of Great Western's stockholders.
This commitment has resulted in the
execution of a merger agreement with
Washington Mutual -- no factors have come
to the Great Western Board's attention
that have altered its belief that the
Great Western/Washington Mutual merger is
in the best interests of Great Western's
stockholders. Based on all the facts, the
Great Western Board remains committed to
the Great Western/Washington Mutual
merger.
o Ahmanson is a Known Entity. As a result
of many years of direct competition with
Ahmanson and presentations made by Great
Western's outside advisors to the Great
Western Board throughout the past few
years, the Great Western Board and Great
Western management are thoroughly familiar
with the business, operations and
strategic direction of Ahmanson. Based on
this knowledge, the Great Western Board
concluded that Ahmanson was not a good
strategic fit for Great Western.
o A Level Playing Field. Ahmanson claims
that there is an unlevel playing field;
however, it was Ahmanson which sought,
through a carefully orchestrated campaign
consisting of litigation, analyst
presentations and press releases, and a
proxy and consent solicitation, to
stampede Great Western and its
stockholders into accepting Ahmanson's
inferior merger proposal and discourage
other potential bidders for Great Western.
o Timing. Ahmanson claims that the
consummation of its proposed exchange
offer is on a time track similar to that
of the Great Western/Washington Mutual
merger. However, Washington Mutual will
submit the Great Western/Washington Mutual
merger to its stockholders for approval in
two weeks; Ahmanson has not even filed a
proxy statement with the Securities and
Exchange Commission in order to solicit
the approval of its stockholders -- an
approval that is required for Ahmanson to
consummate its proposed exchange offer.
As indicated above, we have also attached
hereto for your review revised and updated versions Great
Western's earlier presentations. These presentations
reflect, among other things, Great Western's belief that
Ahmanson's solicitation for three board seats and in
support of by-law amendments is being undertaken solely
in an effort to further Ahmanson's acquisition proposal.
We appreciate your consideration of the foregoing.
Sincerely,
/s/ Fred B. White, III
----------------------
Fred B. White, III
[A complete copy of the advertisement filed by Great
Western Financial Corporation with the SEC on May 27,
1997 was attached to this letter.]
May 22, 1997
(as updated on May 30, 1997)
GREAT WESTERN FINANCIAL CORPORATION
Summary of Great Western Financial Corporation's
Position with Respect to Issues Relating to Solicitation
by H. F. Ahmanson & Company For Three Seats on Great
Western's Board of Directors and in Support of Five
Separate By-law Amendments
1. Election of Directors
---------------------
o Ahmanson repeatedly asserts that its three
nominees "are not committed to any particular
proposal" and "will in no way be controlled by
or acting at the direction of Ahmanson." This
is not credible. Despite the fact that, if
elected, Ahmanson's nominees will have
fiduciary duties to all Great Western
shareholders, they can be expected to serve
Ahmanson's interests.
- On April 21, 1997, the press reported a
statement by Charles Rinehart that
electing three directors to Great
Western's Board was key to Ahmanson's plan
to take over Great Western.
- In Ahmanson's lawsuit relating to the date
of the Annual Meeting, the Delaware
Chancery Court, in a slip opinion, stated:
"Ahmanson was pressing the Court to ...
serve primarily Ahmanson's individual
strategic interests as a bidder, as
distinguished from the interests of Great
Western shareholders generally."
- Ahmanson has agreed to indemnify each
Ahmanson nominee against all claims
incurred by such nominees in connection
with being a nominee and in connection
with being a director of Great Western if
elected, including any claims for breach
of fiduciary duties.
o Throughout the past 3 months, the Great Western
Board believes it has done exactly what a Board
of Directors should do in responding to a bid
for a company. It has always acted in the best
interests of shareholders. There is no issue
of attempted entrenchment. The Washington
Mutual merger, based on comparative market
prices of Ahmanson and Washington Mutual on
March 6 (the day of announcement), delivered
almost $700 million of additional value to
Great Western stockholders.
- We believe that without the Washington
Mutual merger Ahmanson would not have had
any reason to modify its original proposal
to exchange each Great Western share for
1.05 Ahmanson shares as it did on March
17. The original proposal would currently
be worth about $967 million less than the
Washington Mutual merger. Even Ahmanson's
exchange offer proposal, based on
comparative market prices of Ahmanson and
Washington Mutual on May 29, is worth
about $150 million less than the
Washington Mutual merger.
o Great Western's Board is overwhelmingly
comprised of independent directors. The Board
has acted reasonably, rationally, and in the
best interests of its shareholders, in
determining that:
- Washington Mutual is the superior merger
partner, and
- The Washington Mutual merger will provide
superior value to shareholders
(For a detailed discussion of the factors the
Great Western Board considered in reaching
these determinations, and the determination not
to authorize Great Western management to
provide information to, or engage in
negotiations or discussions with, Ahmanson, see
pages 38 through 43 of the Joint Proxy
Statement/Prospectus of Washington Mutual and
Great Western, dated May 13, 1997.) Even the
current indicated values of the Ahmanson
exchange offer proposal and the Washington
Mutual merger are roughly equivalent, with the
indicated value of the Washington Mutual merger
higher on every trading day since May 16.*
-------------------------
* The current implied value is determined by reference
to the respective closing prices of the Washington
Mutual common stock and the Ahmanson common stock
and, in the case of Ahmanson, is based on the
assumption that the average closing price of the
Ahmanson common stock for the applicable pricing
period equals the closing price on the date in
question.
o In order to induce Washington Mutual to enter
into the merger agreement, Great Western agreed
to a standard "no shop" clause. This enables
the Board to act in accordance with its
fiduciary duties, but does not permit Great
Western to enter into discussions with third
parties, including Ahmanson, unless, after
consulting with and considering the advice of
its financial advisors and outside counsel, the
Great Western Board determines in good faith
that the failure to enter into discussions
would create a reasonable possibility of a
breach of its fiduciary duties. The Great
Western Board's decision not to enter into
discussions with Ahmanson is both reasonable
and rational, and consistent with Great
Western's obligations under the Washington
Mutual merger agreement.
o In the event that Great Western shareholders do
not approve the Washington Mutual merger, the
Board will examine all available options. This
should be done by Great Western's independent
Board which will serve the interests of all
shareholders, without the three designees of a
potential acquiror (Ahmanson) seeking to
influence the Board's decisions.
o There is no reason to question the motives or
decisions of Great Western's Board, nor is
there anything about Ahmanson's proposal that
should cast any doubt on whether the Board has
reasonably acted in the shareholders' best
interests.
2. Proposed By-law Amendments
--------------------------
o Ahmanson's five proposed By-law amendments are:
1. Calling of Special Meetings of
Shareholders by the holders of 10% of
Great Western's stock.
2. Prohibiting persons previously defeated in
an election from being appointed to fill
vacancies on the Board.
3. Requiring an Ahmanson nominee, if elected,
to serve on any executive or comparable
committee of the Board.
4. Specifying that certain information be
included in notices of Board meetings.
5. Providing that only shareholders may amend
or repeal any By-laws adopted at the 1997
Annual Meeting.
o These proposed By-laws should be viewed in
their totality as a further effort by Ahmanson
to restrict the Great Western Board's ability
and flexibility in responding to the Ahmanson
proposal and protecting the interests of
shareholders.
o Ahmanson seeks to portray itself as an advocate
of good governance. This is empty rhetoric.
These proposals are in Ahmanson's interests;
not the interests of Great Western's
shareholders. Not one of these proposed
amendments is included in Ahmanson's own By-
laws.
- For example, Ahmanson already has proposed
ten separate By-law amendments or advisory
resolutions in the consent solicitation
and at the Annual Meeting. Ahmanson is
engaging in three separate contested
solicitations (the consent solicitation;
the Annual Meeting; and the merger vote).
The proposed By-law relating to Special
Meetings of Shareholders could enable
Ahmanson to align itself with the holders
of a small minority of shares and
repeatedly compel additional Special
Meetings at which Ahmanson could present
additional resolutions and proposed By-law
amendments.
o If Great Western's shareholders approve the
Washington Mutual merger, these proposed By-law
amendments will have no relevance. If the
merger is not approved, Ahmanson should not be
permitted to dictate or influence the Board's
further responses.
3. The "Tone" of the Contest
-------------------------
o Ahmanson is unfairly seeking to blame Great
Western for the "tone" of the contest. Great
Western is simply pursuing a strategic merger
its Board believes is in the best interests of
its shareholders. Ahmanson has attacked the
Washington Mutual merger on every front, and
has attacked Great Western, its directors, its
advisors and Washington Mutual.
o While the "tone" is irrelevant to the outcome
and the interests of Great Western's
shareholders, a few points should be made.
o Any confusion that may exist in connection with
Ahmanson's consent solicitation results from
Ahmanson's own actions.
- Ahmanson, in fact, insisted at first that
the 5.2 million double voted shares be
counted twice. It was only after Great
Western brought a lawsuit that Ahmanson
changed its position.
- Ahmanson intentionally refused to cause a
record date to be set for two of its five
consent resolutions. It could easily have
done so.
o Ahmanson says Great Western did not want its
shareholders to vote. This is false. The
Annual Meeting was delayed until the situation
stabilized and shareholders could make informed
decisions. It is Ahmanson which is seeking to
delay the merger vote for several months (six
weeks after certification of the vote at the
Annual Meeting; the certification itself could
take approximately one month as was the case in
the consent solicitation). If Ahmanson were
truly confident it had the superior proposal,
it would welcome a vote by our shareholders on
the Washington Mutual merger.
------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
WASHINGTON MUTUAL, INC.
MERGER WITH
GREAT WESTERN FINANCIAL CORPORATION
THE EXECUTIVE SUMMARY*
ISS MEETING
MAY 22, 1997
UPDATED MAY 30, 1997
* The following is an executive summary of certain more detailed
information contained in Great Western Financial Corporation's
Current Report on Form 8-K (the "Form 8-K") filed with the
Securities and Exchange Commission on May 22, 1997. For further
information concerning certain matters described herein see the
Form 8-K.
------------------------------------------------------------------
Why We Believe the WAMU Transaction Is Best For GWF Shareholders
------------------------------------------------------------------
WE BELIEVE:
o The WAMU transaction creates immediate as well as ongoing
value for GWF shareholders (Page 2)
o The WAMU transaction creates a premier consumer banking
franchise (Page 3)
o The WAMU transaction represents the low risk execution
alternative for GWF shareholders (Page 4)
o The Ahmanson Proposal utilizes questionable assumptions and
relies on imprudent leverage (Page 5)
o That WAMU, compared to Ahmanson, has a proven track record
of delivering shareholder value (Page 6)
o The pro forma combined GWF/WAMU is financially superior to a
combined GWF/Ahmanson (Page 7)
------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
We Believe the WAMU Transaction Creates Immediate As Well As
Ongoing Value for GWF Shareholders
------------------------------------------------------------------
o Highly accretive to earnings per share -- 56% projected
1999E accretion per GWF share
o Earnings growth improved above what GWF shareholders could
expect on a stand-alone basis -- 32% 1997E-1999E pro forma
EPS growth versus 11% standalone EPS growth (a)
o Capital ratios remain strong as excessive leverage is not
required to produce attractive financial returns -- pro
forma tangible common ratio is projected to be in excess of
5%
o Significant growth in net interest income driven by high
projected loan originations at reasonable margins --
projected net loan growth of $11.0 and $11.4 billion for
1998E and 1999E at net interest margins of 1.66% and 1.72%,
respectively
o WAMU has a consistent record of regular dividend increases --
29% average annual increase since 1991 (b)
(a) Standalone EPS growth based on First Call mean
estimates as of May 6, 1997.
(b) The historical pro forma dividend for GWF stockholders
would be higher in a merger with Ahmanson ($1.06 per
share) than in a merger with WAMU ($0.94 per share).
------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
We Believe the WAMU Transaction Creates a Premier Consumer
Banking Franchise
------------------------------------------------------------------
o Will rank in top three in consumer deposit market share in
California, Washington and Oregon and 5th in Florida
o Number one-ranked originator of single family mortgage loans
in Washington and Oregon, and number two-ranked in
California
o WAMU's proven consumer banking capabilities have produced
cumulative average growth rates since 1993 of 7% in consumer
loans, 52% in depositor fee income, 23% in retail checking
accounts and 10% in total households served. These
capabilities will be applied to GWF's customer base
------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
We Believe the WAMU Transaction Represents the Low Risk Execution
Alternative For GWF Shareholders
------------------------------------------------------------------
o The WAMU management team has worked together for a
significant number of years (more than 14 years average
tenure vs. less than 4 for Ahmanson management) and has
considerably greater experience integrating large
acquisitions as compared to Ahmanson's management team
(Since 1990, WAMU has completed 6 acquisitions with
consideration greater than 10% of its standalone market
capitalization prior to each purchase compared to only 1
such acquisition for Ahmanson)
o GWF's systems are compatible with WAMU's, not with
Ahmanson's. WAMU and GWF both use the Hogan system for
deposit operations and Alltel for loan servicing
o WAMU will continue to use the GWF name in California,
benefiting customer retention
o WAMU is a friendly transaction which we believe will result
in faster and smother integration. Ahmanson is a hostile
offer that has antagonized employees
o We believe a faster solution to the situation is better for
shareholders, employees and customers. WAMU is on track for
a closing in early July
------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
We Believe the Ahmanson Proposal Utilizes Questionable
Assumptions and Relies On Imprudent Leverage
------------------------------------------------------------------
o Ahmanson's projected cost savings are $114 million or 34%
greater than WAMU's, a difference that we do not believe can
be supported by Ahmanson's proposed 100 additional branch
closures
o Ahmanson's earnings are significantly more sensitive to
achieving the stated cost savings target than are WAMU's.
Based on the achievement of 50% of projected synergies,
Ahmanson's 1999E EPS accretion/(dilution) would be 17
percentage points less than its pro forma base case versus
10 percentage points for WAMU
o Ahmanson's EPS forecasts depend on massive share repurchases
that leave little room for error -- share repurchases plus
dividends are projected to equal 178% of net income through
1999E
o Massive share repurchases will result in Ahmanson continuing
to have one of the lowest consolidated tangible common
equity ratios in the industry -- pro forma ranking of 92 out
of 93 savings and loan holding companies (a)
o Ahmanson's intangibles will total 58% of total equity and
the amortization expense will be in excess of 25% of net
income available to common stock in 1998E
(a) This ratio relates to Ahmanson, which is a savings and loan
holding company, and does not relate to its depository
institution subsidiary. Such subsidiary is "well-
capitalized" within the meaning of Office of Thrift
Supervision rules and regulations, which are not applicable
to savings and loan holding companies.
------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
We Believe that WAMU, Compared To Ahmanson, Has a Proven Track
Record of Delivering Shareholder Value
------------------------------------------------------------------
o WAMU has consistently produced greater returns to
shareholders -- ten year total return: 24% vs. 9%
o WAMU has consistently maintained stronger asset quality and
reserve coverage ratios -- NPA-to-assets: 0.93% vs. 2.06;
Reserves-to-NPLs: 110% vs. 50%
o WAMU has delivered superior growth in earnings per share and
dividends per share -- annual dividend growth: 29% vs. 0%
(a)
o WAMU has a more attractive mix of loans and deposits and is
geographically more diversified -- consumer loans: 10% vs
3%; transaction + money market + savings accounts: 42% vs.
32%
o WAMU's loan originations have been growing while Ahmanson's
have been declining -- 1994 to 1996 originations: 46%
increase vs. 47% decrease
(a) The historical pro forma dividend for GWF stockholders
would be higher in a merger with Ahmanson ($1.06 per
share) than in a merger with WAMU ($0.94 per share).
------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
We Believe the Pro Forma Combined GWF/WAMU Is Superior To a
Combined GWF/Ahmanson
------------------------------------------------------------------
o GWF shareholders, for each GWF share, will receive greater
earnings and book value in a WAMU transaction than in an
Ahmanson transaction (see page 8)
o A combination with WAMU will produce higher growth rates in
EPS and book value than a combination with Ahmanson which
should result in higher valuation multiples for WAMU (see
page 8)
o Return on assets and equity are materially higher in a
combination with WAMU (see page 8)
o Capital, asset quality and reserve coverage ratios are
significantly stronger in a combination with WAMU (see page
8)
------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
We Believe the Pro Forma Combined GWF/WAMU Is Superior To a
Combined GWF/Ahmanson
------------------------------------------------------------------
<TABLE>
<CAPTION>
WAMU Ahmanson
Transaction Proposal
----------- --------
<S> <C> <C>
EPS
---
1999E Accretion to GWF Shareholder (a) 56% 39%
1997E-1999E Growth 32% 22% (b)
Capital
-------
12/31/97E Tangible Common Equity Ratio 4.91% (c) 3.46% (b)
and projected and projected
to increase to be flat
12/31/97E Tangible Book Value per GWF $19.28 $12.22 (b)
Share
1997E-1999E Growth in Tangible Book 20% 3%(b)
Value per Share
Returns
-------
1999E Return on Assets 1.35% (c) 0.98% (b)
1999E Return on Common Equity 23.1% (c) 11.7% (b)
Asset Quality
-------------
NPAs/Assets @ 3/31/97 0.94% (d) 1.35% (d)
Reserves/NPLs @ 3/31/97 119% (d) (e) 83% (d) (e)
(a) Relative to First Call mean estimates for 1998E. 1999E
assumes 10% EPS growth over 1998E First Call mean estimate.
(b) Based on Ahmanson's March 25, 1997 Press Release.
(c) Based on data presented in or underlying WAMU's S-4
Registration Statement dated March 13, 1997 and recent
transaction-related analyst presentations. Assumes 10%
annual growth rate of tangible assets, for illustrative
purposes.
(d) NPL and NPA ratios exclude restructured loans.
(e) Reflects $100 million increase in loan loss reserves.
</TABLE>
------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
GWF Per Share Deal Value -- WAMU & Ahmanson
------------------------------------------------------------------
[Graph with two lines, one solid line for WAMU Transaction and
one dotted line for Ahmanson Proposal]
[Horizontal line: date hash-marks at two-week intervals (2/18/97
- 5/29/97); Vertical line: Per GWF Share Deal Value (40.00 - 52.00)]
<TABLE>
<CAPTION>
Ahmanson WAMU
Date Proposal Transaction
---- -------- -----------
<S> <C> <C>
2/18 $ 47.12
2/19 45.28
2/20 44.10
2/21 43.18
2/24 44.36
2/25 43.58
2/26 44.10
2/27 44.10
2/28 43.18
3/03 43.71
3/04 43.44
3/05 44.10
3/06 42.79 $ 47.70
3/07 44.23 47.59
3/10 44.49 48.94
3/11 43.84 49.05
3/12 43.31 47.93
3/13 42.39 46.46
3/14 42.26 45.34
3/17 47.70 46.01
3/18 46.80 45.45
3/19 47.55 45.45
3/20 47.40 45.45
3/21 47.25 45.11
3/24 46.95 45.23
3/25 46.50 46.07
3/26 46.65 45.45
3/27 44.85 44.61
3/31 43.65 43.48
4/01 44.40 43.31
4/02 43.65 42.53
4/03 43.80 43.59
4/04 42.45 42.92
4/07 42.60 43.14
4/08 44.55 44.44
4/09 44.25 43.26
4/10 44.70 42.98
4/11 42.30 40.95
4/14 42.30 41.74
4/15 44.40 42.86
4/16 43.95 42.08
4/17 43.95 42.53
4/18 43.20 41.96
4/21 42.90 41.85
4/22 43.20 41.63
4/23 43.95 42.08
4/24 43.65 41.40
4/25 42.60 40.84
4/28 43.65 40.95
4/29 44.40 42.08
4/30 45.75 44.44
5/01 45.45 43.43
5/02 47.40 45.45
5/05 47.85 46.46
5/06 48.90 47.42
5/07 47.25 46.69
5/08 47.70 47.19
5/09 47.25 46.97
5/12 48.00 47.42
5/13 48.00 47.08
5/14 49.20 48.71
5/15 49.05 48.88
5/16 49.65 49.95
5/19 49.80 50.29
5/20 50.00 50.40
5/21 49.05 50.01
5/22 49.50 49.56
5/23 48.60 49.39
5/27 47.55 48.49
5/28 47.40 48.66
5/29 47.40 48.49
</TABLE>
[Graphics: arrow pointing to Ahmanson Proposal line at
coordinate (02/18/97, 47.12) with text box: 02/18/97 Ahmanson
launches a hostile bid for GWF at an exchange ratio of 1.05x;
arrow pointing to WAMU Transaction line at coordinate (03/06/97,
47.70) with text box: 03/06/97 WAMU announces merger agreement
with GWF at an exchange ratio of 0.9x; arrow pointing to Ahmanson
Proposal line at coordinate (03/17/97, 47.70) with text box:
03/17/97 Ahmanson moves to floating exchange ratio with collar
(1.2x - 1.1x)]
------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
Exchange Ratio Analysis -- Ahmanson Proposal
------------------------------------------------------------------
[Graph appears here. Horizontal line: Ahmanson Stock Price
($37.00 - $50.00); Vertical line: Offer Value Per GWF Share
($44.00 - 56.00); To the right of vertical line appears a
subtitle: 1.20x Exchange Ratio; followed by a vertical line:
$41.67; followed by a subtitle: 1.20 to 1.10x Exchange Ratio $50
Offer; followed by a vertical line: $45.45; followed by a
subtitle: 1.10x Exchange Ratio; Diagonal line from coordinates
(37.00, 44.40) to (41.67, 50.00) becoming a horizontal line from
coordinates (41.67, 50.00) to (45.45, 50.00) becoming a diagonal
line from coordinates (45.45, 50.00) to (50.00, 55.00); graphic:
arrow with text: Current Ahmanson Price pointing to coordinate
(39.50, 47.40) with dashed vertical and horizontal lines from
that coordinate to the horizontal and vertical axes of the
graph.]
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Comparison of Upside Potential (a)
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<TABLE>
<CAPTION>
WAMU Transaction Ahmanson Proposal
-------------------------------------- -------------------------------------------------------------
Change In Exchange Implied Value Exchange Implied Value WAMU
Stock Price Price Ratio Per GWF Share Price(c) Ratio Per GWF Share Superiority
----------- ----- ----- ------------- ------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Current (b) $53.88 0.90x $48.49 $39.50 1.20x $47.40 $1.09
5% Appreciation 56.57 0.90 50.91 41.48 1.20 49.77 1.14
10% Appreciation 59.26 0.90 53.34 43.45 1.15 50.00 3.34
15% Appreciation 61.96 0.90 55.76 45.43 1.10 50.00 5.76
(a) Reflects pre-merger values only.
(b) As of May 29, 1997.
(c) Ahmanson's exchange offer ratio would be fixed based upon the
average closing price of Ahmanson stock for the 20 trading days
prior to the third trading day prior to the expiration of its
exchange offer, or in the event of a merger with Great Western, the
20 trading days prior to the receipt of OTS approval. Shown
figures assume the average closing price for the 20 day period was
equal to the closing price on that date.
</TABLE>
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