AHMANSON HIKES GW BID : LATEST OFFER TOPS RIVAL'S BY $400 MILLION.

Byline: Gregory J. Wilcox Daily News Staff Writer

H.F. Ahmanson & Co. raised its hostile bid for Chatsworth-based Great Western Financial Corp.. to $6.62 billion Monday, intensifying the fight with Washington Mutual Inc.

Irwindale-based Ahmanson's new offer is about $400 million more than that of Seattle-based Washington Mutual, which Great Western's board of directors has accepted but which still must be approved by company shareholders.

Washington Mutual officials declined Monday to say whether they would increase their offer.

The new bid by Ahmanson, parent of Home Savings of America, was announced before trading commenced on Monday and initially was worth about $3 a share more than Washington Mutual's $6.41 billion offer.

But the gap narrowed to about $1.70 by the closing bell as Ahmanson's stock price fell and Washington Mutual's increased. Ahmanson closed at 39-3/4, down -1/2; Washington Mutual closed at 51-1/8, up -3/4 and Great Western closed at 45-1/4, down -1/4.

Ahmanson executives said they increased their offer after deciding they could cut costs more than originally expected after studying information Washington Mutual disclosed in a Securities and Exchange Commission filing. They initially estimated the cost savings at $400 million but revised it up to $450 million.

Dave Winton, an analyst at Keefe Bruyette & Woods in New York, said Ahmanson's new offer seems realistic.

``I do think their cost savings estimates are real,'' he said of Ahmanson. ``And I think right now management at Washington Mutual has drawn on a lot of shareholder goodwill.''

All the parties responded in a tone that has become typical for this type of bruising corporate fight. Ahmanson made its initial offer on Feb. 27, which Great Western rebuffed. Washington Mutual's ``white knight'' bid was accepted March 6.

Charles R. Rinehart, Ahmanson's chairman and chief executive officer, urged Great Western's board to take up his company's offer immediately.

``We believe that this is a proposal that Washington Mutual cannot match without increasing its own shareholders' dilution to what must be an unacceptable level,'' he said in a statement.

Great Western said later Monday that the company would review the new bid.

``Great Western (has) signed a definitive strategic merger agreement with Washington Mutual Inc. Great Western continues to oppose any effort by Ahmanson to limit the Great Western board's flexibility and alternatives,'' the statement said.

And Washington Mutual also noted that it has entered into a ``binding agreement'' with Great Western. Its deal includes up to $195 million in fees if another company buys Great Western in the next 18 months.

``H.F. Ahmanson & Co.'s hostile, unsolicited actions do not alter the conclusion that the Washington Mutual-Great Western combination will provide a stronger, more financially sound company in terms of tangible capital, credit quality and potential earnings power,'' the company said.

Either combination would create the nation's largest thrift. But there will be deeper job cuts and the Great Western name would disappear if Ahmanson wins.

Washington Mutual also has operations in California through its $1.7 billion acquisition last December of Keystone Holdings Inc. and its Irvine-based subsidiary, American Savings Bank.

CRUNCHING THE NUMBERS

Here is how to calculate the value of H.F. Ahmanson & Co.'s hostile bid for Great Western Financial Corp.:

First multiply Ahmanson's closing stock price, which changes daily, by the exchange ratio offer. In this deal, that fluctuates between 1.100 and 1.200 because the higher Ahmanson's stock price, the lower the exchange ratio.

Then multiply this number by the number of outstanding shares of Great Western, which also changes daily.

CAPTION(S):

Box

Box: (Color) CRUNCHING THE NUMBERS (See text)