Home Savings Targets Rival Thrift Great Western Weighing $6.5 Billion Hostile Takeover Bid

Looking to expand as the nation’s largest savings and loan operator, the parent of Home Savings of America has launched a hostile $6.5 billion bid for rival Great Western Financial Corp.

A merger would combine the nation’s top two thrifts and have a particularly strong impact in California, where they are based. Home Savings parent H.F. Ahmanson & Co. said one-quarter of their 800 combined branches would be shut to cut costs.

Ahmanson sent the offer to Great Western’s chief executive and its board Monday night and made it public on Tuesday. Great Western confirmed it had received the bid and said it would study the proposal.

“It would create an institution that here in California, and also in Florida - our two key markets - will have the ability to compete with the largest of the banks,” Charles R. Rinehart, Ahmanson’s chairman and chief executive, said at a news conference.

Great Western’s shares soared 31 percent on the news, with Wall Street apparently optimistic the deal, in some form, will go through.

The combination, Ahmanson said, would have assets of $93 billion. It expects cost savings to exceed $400 million a year within two years of the deal’s completion.

While the 200 branch closings are planned, Ahmanson said it was unable to provide a specific number of positions to be eliminated. Most branches to be shuttered are within a mile of each other and disruption to customers will be minimal, it added. Ahmanson said it would attempt to use attrition as much as possible to minimize cuts.