CALFED TO ISSUE SUPER-WARRANTS!
CALIFORNIA FEDERAL BANK AND FIRST NATIONWIDE BANK TO MERGE
James F. Hurley (213) 930-9750
Frank W. Moore (213) 932-4203
LOS ANGELES, Calif., July 29, 1996 -- Cal Fed Bancorp Inc. (NYSE:CAL),
the parent company of California Federal Bank, FSB, today said that it
has signed a definitive merger agreement with First Nationwide Holdings
Inc., the parent company of First Nationwide Bank, San Francisco.
Terms of the agreement provide for each Cal Fed Bancorp stockholder to
receive a cash payment of $23.50 per common share, for a total estimated
cash consideration of $1.2 billion, plus a new security representing a
right to participate in the cash proceeds, if any, recovered in
California Federal Bank's pending breach-of-contract lawsuit against the
federal government. The lawsuit relates to the phase-out of the Bank's
supervisory goodwill resulting from the enactment of FIRREA by Congress
in 1989.
The new security will be a participation certificate issued by
California Federal Bank. One certificate will be distributed for each
ten common shares of Cal Fed Bancorp held at the time of closing. Each
certificate will entitle the holder to receive a pro rata portion of 60
percent of the net distributable cash proceeds, if any, of the Bank's
goodwill lawsuit after a) payment of expenses, b) pro forma taxes, c)
the net cash proceeds distributable to the holders of the Bank's
previously issued participation certificates (CALGZ:NASDAQ Small Cap),
which represent the right to the first 25 percent of the net
distributable cash proceeds, and d) the retention of $125 million of net
distributable cash proceeds by the Bank. California Federal Bank will
apply for the new participation certificates to be quoted and traded
through NASDAQ.
In March 1994, when our common stock was trading at $9.50 per share
and our management team was tackling the major issues of our
restructuring, we promised stockholders value for their investment,
said Edward G. Harshfield, president and chief executive officer of
California Federal Bank and its parent company. Today, we are keeping
our promise.
The transaction, which is subject to approval by Cal Fed Bancorp
stockholders and by regulatory authorities, is expected to close in the
first quarter of 1997.
Our Board is unanimous in its strong conviction that this transaction
offers outstanding value for our stockholders, said David Gilbert,
Ph.D., chairman of the board of Cal Fed Bancorp and California Federal
Bank.
In connection with the execution of the merger agreement, Cal Fed
Bancorp Inc. granted First Nationwide Holdings an option, exercisable
under certain circumstances, to purchase 9,829,992 shares of its common
stock (representing approximately 19.9 percent of the shares presently
outstanding) at a price of $21.375 per share.
Under the merger agreement, California Federal Bank s 10.625 percent
Noncumulative Perpetual Preferred Stock, Series B (NYSE:CALPRB), will
remain outstanding.
Based in San Francisco, First Nationwide Bank has approximately $17
billion in assets and 117 retail branches in three states -- California,
Florida and Texas. The bank's mortgage subsidiary, Maryland-based First
Nationwide Mortgage Corporation, originates mortgage loans, primarily on
a wholesale basis, in 44 states.
First Nationwide Bank is an indirect subsidiary of MacAndrews and
Forbes Holdings, a private holding company with interests in consumer
products, publishing and entertainment, in addition to financial
services.
California Federal Bank, with approximately $14 billion in assets,
provides retail and business banking services through 118 retail
branches and seven lending offices in California and Nevada. |
