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SCHEDULE 14A INFORMATION
REVOCATION 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 (Revocation of Consent
Statement)
{_} Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
{_} Definitive Proxy Statement (Revocation of Consent
Statement)
{X} Definitive Additional Materials
{X} Soliciting Material Pursuant to Rule 14a-11(c) or
Rule 14a-12
GREAT WESTERN FINANCIAL CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(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 trans-
action 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):
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(4) Proposed maximum aggregate value of transac-
tions:
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(5) Total fee paid.
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{_} 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Attached are talking points used by the management of Great Western
Financial Corporation in a presentation made to representatives of the
Institutional Shareholder Services on March 17, 1997.
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SUMMARY OF ARGUMENTS OPPOSING AHMANSON CONSENT
SOLICITATION
This summary outlines the positions of Great Western
concerning the issues raised by Ahmanson's consent solicitation.
I. Overview
- - The various Ahmanson proposals have to be viewed in the context of
Ahmanson's merger proposal and the ability of the Great Western Board
of Directors to respond in an appropriate manner.
- - Ahmanson's proposals, individually and collectively, are designed to
limit the Great Western Board's flexibility and alternatives, and to
coerce Great Western into accepting Ahmanson's merger proposal.
- - Put simply, these proposals are not designed to benefit Great Western
and Great Western's stockholders. Instead, they are designed to
benefit Ahmanson and Ahmanson's stockholders.
- - From the beginning Ahmanson's tactics have been disruptive to
the continuing operations of Great Western. Mr. Rinehart began by
disparaging Great Western's employees as incompetent and has spent
the last month attempting to back peddle from that statement. Great
Western is in a customer oriented business and its employees are
essential to its success. The Great Western employees are excited at
the prospect of a merger with Washington Mutual. In contrast, the
Great Western employees are very negative toward a merger with
Ahmanson.
- - Every action and every response by the Great Western Board has been
taken to further the interests of Great Western's stockholders and
other constituencies.
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II. Actions of the Great Western Board
- - Let's look at the Great Western Board's responses:
- It refused to be pressured into accepting
Ahmanson's merger proposal.
- It adopted a fairly standard By-law relating to the record
date for Ahmanson's consent solicitation in order to provide
for an orderly and rational consent solicitation process, and
ensure that Great Western would have the opportunity to
consider all relevant information before they make a decision
as to whether to execute Ahmanson's consent. Ahmanson,
undoubtably, would have preferred to hurry Great Western
stockholders to make important decisions before they knew
Great Western's response and before Washington Mutual
appeared on the scene.
- It postponed its upcoming annual meeting in order to keep
Ahmanson from pressuring the stockholders into making a hasty
decision regarding the future of Great Western during an
unstable situation where they do not have adequate
information to cast an informed vote.
- - The Great Western board did not try to ignore the Ahmanson merger
proposal. It did not try to remain independent. As always, it put
stockholder interests first. The Great Western board carefully
considered all of its strategic alternatives and entered into a merger
agreement with Washington Mutual.
- - The Great Western Board has not done anything to call into question
its dedication to stockholder interests and there is absolutely no
reason to seek to limit the Board's flexibility or alternatives.
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III. The Ahmanson Proposals
A. General
- The Ahmanson proposals are not designed to promote
stockholder democracy or allow Great Western's
stockholders to decide the future of the company,
but rather to coerce the Great Western stockholders
to accept Ahmanson's merger proposal.
- The Ahmanson proposed by-law amendments
are not only highly unusual, but not a
single one of them appears in Ahmanson's
by-laws. If the proposed by-law amend-
ments are so good for Great Western and
its stockholders, why aren't they also
good for Ahmanson and its own stockhold-
ers?
B. PROPOSAL 1 (Precatory resolution to consider
any bona fide merger proposal received by May
22, 1997 or accept Ahmanson merger proposal)
- Great Western has entered into a definitive merger
agreement with Washington Mutual, therefore,
Ahmanson's proposal 1 is moot.
C. PROPOSAL 2 (BREAK-UP FEES)
- Great Western was able to negotiate a merger with
Washington Mutual, providing its stockholders with
hundreds of millions of dollars more than Ahmanson's
original merger proposal because, among other
things, it had the flexibility to negotiate a
break-up fee.
- Ahmanson acknowledges that Proposal 2 does
not impact the Washington Mutual merger
agreement. In a reply brief dated March
14, 1997, Ahmanson states that it "does
not argue that the proposed by-law would
apply to the [Washington Mutual] merger
agreement." The issue before the stock-
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holders is whether to limit the Board's
flexibility in the future.
- Great Western continues to face a fluid
situation which requires maximum flexibil-
ity in order to react to changing circum-
stances. Further negotiation with Wash-
ington Mutual or other parties may be
required and the board will continue to
need maximum flexibility in any such nego-
tiations.
- Ahmanson asserts repeatedly in its solic-
iting materials that the purpose of pro-
posal 2 is to give Great Western stock-
holders the final say over the granting of
certain merger-related break-up fees. But
the fact is that Ahmanson is also intending to
solicit proxies at Great Western's annual meeting in
favor of a by-law amendment which would give its
nominees, if elected to the Great Western Board, an
absolute veto over these very same breakup fees
regardless of what the stockholders decide.
D. PROPOSAL 3 (THE ANNUAL MEETING)
- Why does Ahmanson want to force Great
Western to hold a quick annual meeting?
- Ahmanson is attempting to dictate the date
of the Great Western annual meeting in
order to further Ahmanson's own interests.
- Ahmanson is pushing for a quick annual
meeting in order to pressure Great Western
stockholders into making an important
decision regarding the future of Great
Western without adequate information to
cast an informed vote.
- Ahmanson is attempting to elect three
directors to the Great Western board in
order to push the rest of the
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board into accepting Ahmanson's merger
proposal regardless of the best interests
of Great Western or its Stockholders.
- Great Western is currently in an unstable
situation. If Great Western were forced
to hold its annual meeting prematurely
Ahmanson could raise its offer shortly
before the vote was to be taken, forcing
stockholders to make a decision before the
Great Western board has had a chance to
react.
- The annual meeting would serve as a prema-
ture referendum on the merits of
Ahmanson's proposal as compared to that of
Washington Mutual. Great Western stock-
holders will have the ability to vote on
the merger with Washington Mutual at the
special meeting of stockholders of Great
Western.
E. PROPOSAL 4 (prohibiting any adjournments) AND
Proposal 5 (preventing the amendment of any of
the Ahmanson proposals without the vote of a
majority of the outstanding shares of common
stock)
- Proposal's 4 and 5 are part and parcel of Ahmanson's
scheme to promote its interests and advance the
Ahmanson merger proposal by unduly restricting the
flexibility of the board to act at all times in the
best interests of stockholders.
IV. Washington Mutual v. Ahmanson
- - Difference in strategies and initiatives
-- Ahmanson - fewer products, narrower busi-
ness strategies
-- Buy backs to increase earnings per share
- - Geographic concentration in California v. diversi-
fied Western franchise
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- - Ahmanson has higher risk profile with greater exposure to multifamily
loans and commercial real estate
- - Washington Mutual has a higher dividend payout history
- - Cost savings and operating efficiencies (information systems)
- - Management of Washington Mutual's proven track record of acquisitions
v. Ahmanson's focus on branch purchases
- - Ahmanson's low tangible common equity
- - Pooling v. Purchase
V. Conclusion
- - Ahmanson does not have any concern for the best interests of Great
Western stockholders or stockholder democracy. Ahmanson's consent
solicitation is part of a carefully planned scheme to pressure the
Great Western Board and the Great Western stockholders into accepting
its merger proposal.
- - It is not necessary at this stage for ISS to make any judgments
on the merits of Ahmanson's merger proposal versus Great Western's
contract with Washington Mutual. Great Western stockholders will
have the opportunity to vote on the proposed merger with Washington
Mutual at the special meeting of stockholders which will be held for
that purpose. At that time, Great Western stockholders will have
enough information to cast an informed vote.
- - At this stage the only decision before ISS and the Great Western
stockholders is whether they should give Ahmanson their consent to
limit the flexibility of the Great Western Board and push an annual
meeting so Ahmanson can use the timing of the shareholder vote as a
premature referendum on the merits of its unsolicited merger proposal.
- - The Great Western Board has consistently acted in the best interests
of stockholders and has not done anything to call into question its
dedication to
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stockholder interests and there is absolutely no reason to seek to
limit the Board's flexibility or alternatives.
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Great Western Financial Corporation ("Great Western") and certain other
persons named below may be deemed to be participants in the solicitation of
proxies in connection with the merger of Great Western and a wholly-owned
subsidiary of Washington Mutual, Inc. ("Washington Mutual") pursuant to which
each outstanding share of Great Western common stock would be converted into
0.9 shares of Washington Mutual common stock (the "Merger"). The participants
in this solicitation may include the directors of Great Western (James F.
Montgomery, John F. Maher, Dr. David Alexander, H. Frederick Christie, Stephen
E. Frank, John v. Giovenco, Firmin A. Gryp, Enrique Hernandez, Jr., Charles D.
Miller, Dr. Alberta E. Siegel and Willis B. Wood, Jr.); the following executive
officers of Great Western: J. Lance Erikson, Carl F. Geuther, Michael M.
Pappas, A. William Schenck III, Ray W. Sims and Jaynie M. Studenmund; and the
following other members of management of Great Western: Stephen F. Adams, Bruce
F. Antenberg, Barry R. Barkley, Ian D. Campbell, Charles Coleman, Allen D.
Meadows and John A. Trotter (collectively, the "Great Western Participants").
As of the date of this communication, James F. Montgomery and John F. Maher
beneficially owned 605,488 shares and 611,762 shares of Great Western common
stock, respectively (including shares subject to stock options exercisable
within 60 days). The remaining Great Western Participants do not beneficially
own, individually or in the aggregate, in excess of 1% of Great Western's
equity securities. The Great Western Participants do not benefi- cially own,
individually or in the aggregate, in excess of 1% of Washington Mutual's equity
securities.
Great Western has retained Goldman, Sachs & Co. ("Goldman Sachs") and
Merrill Lynch & Co. ("Merrill Lynch") to act as its financial advisors in
connection with the Merger, as well as the merger proposal by H.F. Ahmanson &
Company, for which they received and may receive substantial fees. Each of
Goldman Sachs and Merrill Lynch is an investment banking firm that provides a
full range of financial services for institutional and individual clients.
Neither Goldman Sachs nor Merrill Lynch admits that it or any of its directors,
officers or employees is a "participant" as defined in Schedule 14A promulgated
under the Securities Exchange Act of 1934, as amended, in the proxy
solicitation, or that Schedule 14A requires the disclosure of certain
information concerning Goldman Sachs and Merrill Lynch. In connection with
Goldman Sachs' role as financial advisor to Great Western, Goldman Sachs and
the following investment banking employees of Goldman Sachs may communicate in
person, by telephone or otherwise with a limited number of institutions,
brokers or other persons who are stockholders of Great Western: Joe Wender,
John Mahoney, Andy Gordon, Todd Owens and Andrea Vittorelli. In connection with
Merrill Lynch's role as financial advisor to Great Western, Merrill Lynch and
the following investment banking employees of Merrill Lynch may communicate in
person, by telephone or otherwise with a limited number of institutions,
brokers or other persons who are stockholders of Great Western: Herb Lurie,
Louis S. Wolfe, Paul Wetzel, Frank V. McMahon, John Esposito, Alex Sun,
Christopher Del-Moral Niles and Kavita Gupta. In the normal course of their
respective businesses Goldman Sachs and Merrill Lynch regularly buy and sell
securities issued by Great Western and its affiliates ("Great Western
Securities") and Washington Mutual and its affiliates ("Washington Mutual
Securities") for its own account and for the accounts of its customers, which
transactions may result from time to time in Goldman Sachs and its associates
and Merrill Lynch and its associates having a net "long" or net "short"
position in Great Western Securities, Washington Mutual Securities, or option
contracts or other derivatives in or relating to Great Western Securities or
Washington Mutual Securities.
As of March 14, 1997, Goldman Sachs held positions in Great Western
Securities and Washington Mutual Securities as principal as follows: (i) net
"long" 9,669 of Great Western's common shares; (ii) net "long" $1 million of
great Western's deposit notes; and (iii) net "long" 1,980 of Washington
Mutual's convertible preferred stock. As of March 14, 1997, Merrill Lynch had
positions in Great Western Securities and Washington Mutual Securities as
principal as follows: (i) net "long" 8,800 of Great Western's common shares;
and (ii) net "long" 1,527 of Washington Mutual's common shares.
Other participants in the solicitation include Washington Mutual and
may include the directors of Washington Mutual (Douglas P. Beighle, David
Bounderman, Herbert M. Bridge, J. Taylor Crandall, Robert H. Eigsti, John W.
Ellis, Daniel J. Evans, Anne V. Farrell, William P. Gerberding, Kerry K.
Killinger, Samuel B. McKinney, Michael K. Murphy, Louis H. Pepper, William G.
Reed, Jr. and James E. Stever); the following executive officers of Washington
Mutual: William A. Longbrake, Deanna W. Oppenheimer, Craig E. Tall and S. Liane
Wilson; and the following other members of management of Washington Mutual:
Karen Christensen, JoAnn DeGrande, William Ehrlich, James B. Fitzgerald, Marc
Kittner and Douglas G. Wisdorf (collectively, the "Washington Mutual
Participants"). As of the date of this communication, David Bounderman, J.
Taylor Crandall and Kerry K. Killinger beneficially owned 1,894,141 shares,
6,549,755 shares and 1,044,224 shares of Washington Mutual common stock,
respectively. The remaining Washington Mutual Participants do not beneficially
own, individually or in the aggregate, in excess of 1% of Washington Mutual's
equity securities. The Washington Mutual Participants do not beneficially own,
individually or in the aggregate, in excess of 1% of Great Western's equity
securities.
Washington Mutual has retained Lehman Brothers Inc. ("Lehman Brothers")
to act as its financial advisor in connection with the Merger for which it
received and may receive substantial fees. Lehman Brothers is an investment
banking firm that provides a full range of financial services for institutional
and individual clients. Lehman Brothers does not admit that it or any of its
directors, officers or employees is a "participant" as defined in Schedule 14A
promulgated under the Securities Exchange Act of 1934, as amended, in the proxy
solicitation, or that Schedule 14A requires the disclosure of certain
information concerning Lehman Brothers. In connection with Lehman Brothers'
role as financial advisor to Washington Mutual, Lehman Brothers and the
following investment banking employees of Lehman Brothers may communicate in
person, by telephone or otherwise with a limited number of institutions,
brokers or other persons who are stockholders of Washington Mutual and Great
Western: Steven B. Wolitzer, Philip R. Erlanger, Sanjiv Sobti, David J. Kim,
Craig P. Sweeney and Daniel A. Trznadel. In the normal course of its business
Lehman Brothers regularly buys and sells Washington Mutual Securities and Great
Western Securities for its own account and for the account of its customers,
which transactions may result from time to time in Lehman Brothers and its
associates having a net "long" or net "short" position in Washington Mutual
Securities, Great Western Securities, or option contracts or other derivatives
in or relating to Washington Mutual Securities or Great Western Securities. As
of March 14, 1997, Lehman Brothers had positions in Washington Mutual
Securities and Great Western Securities as follows: (i) net "short" 124 of
Washington Mutual's common shares; and (ii) net "short" 3,327 of Great
Western's common shares.
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