Staff Reporter

The battle to acquire Great Western Financial Corp. is finally coming down to the shareholders.

The really big shareholders.

With the smallest of factors now taking on heightened significance, cross ownership of shares by institutional investors in two or more of the three institutions involved in the takeover battle could ultimately tip the balance in favor of the final winner.

Specifically, H.F. Ahmanson & Co. could benefit from the fact that many of Great Western's major shareholders are also major holders of Ahmanson stock.

Conversely, a smaller portion of Great Western shares are held by shareholders of rival suitor Washington Mutual Inc.

"For the shorter-term investor, the situation (where Great Western and Ahmanson have a number of major investors in common) could have a meaningful impact," said Todd Pitsinger, an analyst at Friedman Billings Ramsey & Co. Inc.

He explained that a one- or two-point rise in Ahmanson stock that would likely follow if Ahmanson were to win the bidding war could be a determining factor for undecided Great Western investors with large Ahmanson holdings.

Likewise, those same shareholders could be hurt in the short term if Ahmanson loses the battle, which would likely cause Ahmanson's stock to drop, he added.

Such expectations could well nudge Great Western shareholders who also own a major Ahmanson stake to choose in favor of the Ahmanson deal when a vote comes up on the matter.

Bill Rubin, a portfolio manager at Fidelity Investments, disagreed that the cross-over holdings factor could tip the scales in Ahmanson's favor.

Fidelity has about 10 million shares in both Great Western and Washington Mutual and another 3.2 million shares in Ahmanson.

Those holdings would allow Fidelity to profit from a deal in either direction, though the firm would probably profit more by a Washington Mutual deal, since it has more Washington Mutual holdings.

"I think, stand-alone or combined with Great Western, Ahmanson stock will do very well. So it doesn't make any difference whether they buy Great Western or not," Rubin said. "It's a win-win-win situation. I don't see how you can lose owning any one or all three of the stocks."

Great Western's annual shareholders meeting where the issue is to be voted on was originally set for April 22. But following the launching of Ahmanson's initial hostile bid, the meeting was indefinitely postponed.


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