Great Western Shareholders Approve Merger

Shareholders overwhelmingly approved the merger of Great Western Financial Corp. with friendly suitor Washington Mutual Inc. on Friday in a deal that would forge the nation’s largest thrift, with assets of about $90 billion.

Regulatory approval is expected late this month or in early July.

Seattle-based Washington Mutual would exchange 0.9 share of stock for each Great Western share. Based on Friday’s stock prices, the deal would be worth about $7.2 billion.

Great Western Bank would keep its name in California and Florida. But about 100 overlapping branch offices would be closed, and untold hundreds or thousands of jobs are expected to be trimmed as well.

Great Western has 12,000 employees, some 7,600 of them in California. The combined thrift would have 1,500 branch and loan offices in 36 states.

Great Western became a takeover target in February when H.F. Ahmanson & Co. launched a hostile bid that led to months of vigorous legal battles as Great Western courted a rival offer from Washington Mutual. Last week, after Ahmanson lost a key court ruling, it dropped out of the bidding.

Before Ahmanson unveiled its takeover bid, Great Western’s stock traded for about $34. Friday, Great Western closed at $52.25 per share, down 12.5 cents on the New York Stock Exchange. Washington Mutual closed at $58.50, down 25 cents on Nasdaq.

Great Western’s special meeting was held in its cafeteria in Chatsworth, and the final shareholder tally was 98% in favor of the deal. A few hours later in Seattle, 93% of Washington Mutual’s shareholders approved the deal.

Great Western Chief Executive John Maher said Friday that however many job losses occur, there would have been twice as many had Ahmanson, parent of Home Savings, taken over Great Western.

Several months ago, Great Western set up a generous severance package of six to 18 months pay for its employees, and few have left the company since then.

At Great Western’s sprawling campus headquarters in Chatsworth, there are about 3,000 employees--from tellers to day-care workers and data processors--and many figure to lose their jobs, although Washington Mutual said it will be weeks before it has a blueprint for consolidation plans.

Laura Snow, who works in Great Western’s public relations office, has only been with the company since November. She is now pregnant with her first child, due in August. “It sounds awful. But hopefully I’ll be laid off so I can take advantage of the severance package and be a full-time mom,” she said.

One Great Western shareholder present at the meeting was George Lewis, who has owned stock since the company went public in 1955.

When Great Western struggled in the early ‘90s, Lewis said, “People got discouraged. And they lost out on valuable securities they should have held.”