Stock prices were up sharply last week for L.A.'s three remaining major thrifts, H.F. Ahmanson & Co., Coast Financial Savings and Glendale Federal Bank, following Ahmanson's recent withdrawal of its hostile takeover bid for Great Western Financial Corp.
Between May 27 (just prior to Ahmanson's withdrawal) and June 12, Ahmanson's stock rose more than 10 percent from $39.625 to $44.625, while Coast's stock jumped to $45.125 from $41.75, and Glenfed's rose to $26.25 from $24.25.
The upward spikes owe largely to scarcity value, since Great Western's expected acquisition by Washington Mutual Inc. will leave only three major thrifts as attractive takeover targets in the L.A. market, said Roger Gordon, a former executive vice president of First Nationwide Holdings, which itself just acquired California Federal Bank earlier this year.
"The thrifts that are left (in L.A.) are all sound, and the fewer that are available, the more competition there'll be for them (from other financial institutions looking to enter the L.A. market)," Gordon said.
Coast's stock price was up to $51 earlier this year, bolstered by rumors that it was in talks to be acquired by Washington Mutual, Gordon pointed out. When Washington Mutual announced its bid for Great Western, however, Coast's stock dropped as low as $40 before its recent recovery.
Gordon called Glenfed a "well-run thrift" that is an attractive takeover target because of its strong earnings. Glenfed is also in the midst of the damages phase of the goodwill lawsuit it won against the federal government late last year. Those damages could result in a $1 billion-plus windfall for the thrift.
Lastly, the sharp rise in Ahmanson's price was driven partly by investor relief over withdrawal of its hostile bid for Great Western.
"I think people thought (Ahmanson CEO) Charlie Rinehart was going to pay too much for Great Western. He finally said, 'I'm not paying any more,' and I think that was music to investors' ears," Gordon said.
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