They intend to be acquired IMHO. The news article last night gave the strongest indications of that yet. biz.yahoo.com
Monday August 25 7:28 PM EDT
AAMES CONFIRMS IN TALKS FOR POSSIBLE COMBINATION
By Sue Zeidler
LOS ANGELES, Aug 25 (Reuter) - After weeks of speculation, Los Angeles-based home equity lender Aames Financial Corp. on Monday confirmed it is in talks for a possible business combination.
Aames said it retained Donaldson, Lufkin & Jenrette Securities Corp. to explore alternatives ranging from expanding the company internally and through acquisition, selling Aames, to merging with another company.
``Over the past several months, we've explored these various options and have met and spoken with a number of institutions, with one objective in mind and that was to maximize shareholder value,'' said Chief Executive Cary Thompson.
The company declined to name the firms it has spoken with, but industry sources said they include Washington Mutual Inc. (WAMU) and California Federal Savings Bank, which was acquired by First Nationwide Holdings Inc. earlier this year.
First Nationwide declined to comment. Washington Mutual said last week the company does not comment on speculation, but said WAMU Chairman Kerry Killinger in the past has stated his desire to expand the company's commerical banking franchise in the western region.
Analysts said Aames, a so-called ``sub-prime'' lender specializing in making mortgage loans at high rates to borrowers with poor credit histories, could attract bids as high as $30 a share, or about $835 million.
``Talks were going on through the weekend. It's a pretty fluid situation,'' said one source familiar with Aames.
One investment banker said that CalFed was considering a cash offer, while an offer by Washington Mutual, which just completed buying California thrift Great Western Financial, would involve a stock exchange.
Several analysts said Washington Mutual may have the upper hand because they believe the board would prefer a stock transaction.
``The board would probably be more amenable to a stock transaction because a cash deal makes it a taxable event and there are a lot of large shareholders on the Aames board,'' said Campbell Chaney, an analyst with Sandler O'Neill Partners.
However, analysts said CalFed could not be ruled out since the company has formidable backing from First Nationwide and has said it wants to enter the sub-prime market.
An analyst who covers Washington Mutual said he would be disappointed if the Seattle-based thrift acquired Aames. ``I thought Washington Mutual would buy H.F. Ahmanson once it completed integrating Great Western,'' he said.
Washington Mutual beat out rival bidder Ahmanson after a long and bitter battle to buy Great Western and several industry observers believe that the transaction has left Ahmanson as a takeover target.
Washington Mutual spokesman Bill Ehrlich said the company is fully focused on its integration of the $8 billion acquisition of Great Western.
The company has said, however, that any merger involving its consumer operations ``would not preclude activity in its commercial banking subsidiary.''
Aames also released its fourth-quarter earnings Monday after previous delays in releasing results had fanned speculation of a pending merger.
``Generally, you delay earnings for a sale,'' said Donald Destino, analyst with Jefferies & Co.
Aames reported a net loss of $14.1 million, or 37 cents a share compared with profits of $8.3 million, or 29 cents a share for the three months ended June 30, 1996.
For the year ended June 30, Aames reported profits of $17.1 million, or 60 cents per share vs. net income of $29.8 million, or $1.14 per share for fiscal 1996.
It said its 1997 fourth-quarter loss reflected $3.9 million in one-time charges tied mainly to severance costs. |
