GW SHAREHOLDERS OK DEAL; 98% OF VOTES CAST FAVOR JOINING WASHINGTON MUTUAL.

Byline: Deborah Adamson Daily News Staff Writer

Shareholders of Great Western Financial Corp., the Chatsworth-based parent of Great Western Bank, on Friday voted overwhelmingly in favor of the company's merger with Washington Mutual Inc.

Of 138 million voting shares, 98 percent were cast in favor of the union with the Seattle-based financial organization.

``Is that number 98 percent?'' asked Great Western Chairman James Montgomery, turning from the podium at the special shareholders meeting to look at company Chief Executive John Maher, who smiled and gave a thumbs up.

Hundreds of shareholders and executives in the room laughed and applauded, in a scene resembling a jovial get-together more than a business meeting.

There was no mention at the special morning meeting of spurned suitor H.F. Ahmanson & Co., the Irwindale-based parent of Home Savings of America, which launched a four-month campaign to persuade shareholders to accept its takeover bid. Ahmanson withdrew the bid last week after it lost a court battle.

``I'm glad it's over,'' said Jack Simons, a shareholder from Los Angeles. ``I think (Washington Mutual) is a better match than Ahmanson would have been.''

At the shareholders meeting in the afternoon, Montgomery and Maher became a bit nostalgic about the passing of Great Western's independence.

Admitting he had ``mixed emotions'' about handing the reins to Washington Mutual, Montgomery reminisced about the first commercial made for Great Western by the late actor John Wayne. But he acknowledged that this is a new era.

``The world is changing. The world is consolidating,'' he said. ``This is an outfit I'm very proud of, and I'm looking forward to the future.''

This is the future: The $6.6 billion merger, expected to close in a few weeks, will create the third-largest banking organization in the West with $87 billion in assets serving 4.1 million households.

Four current Great Western directors will join Washington Mutual's board.

Washington Mutual paid one of the highest premiums in the industry for Great Western stock, more than 3.2 times tangible book value a share, a valuation of company worth.

Washington Mutual expects to incur a pretax charge of $440 million related to the merger, which includes loan-loss reserves of $100 million.

Through cost cuts and economies of scale, however, the combined company expects to save $208 million in 1998 and $340 million in 1999.

This merger will be simpler to integrate than Washington Mutual's acquisition of American Savings Bank because both entities have similar operating systems, Maher said.

Still, 100 branches and 100 loan offices will be consolidated in the merger. Great Western's operations will be integrated with American Savings Bank. The Great Western name will prevail in California, Arizona, Nevada and Colorado.

Most of the closings will be in California. But Washington Mutual likely will want to increase its presence in Florida, Maher said, meaning possibly more branch openings. Great Western has operations in the West and Florida.

Maher said it's not yet clear how many people will be laid off. Also unclear is the fate of Great Western's headquarters in Chatsworth, where 2,000 employees work.

But Maher is sure of one thing: He's not staying on with the new company.

``I think my days are numbered in weeks,'' said Maher, a longtime employee who became CEO less than two years ago. Washington Mutual's CEO, Kerry Killinger, will take over. ``The company doesn't need two chief executive officers.''

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Photo

Photo: (Color) Great Western Chief Executive John Maher speaks to shareholders.