CalFed Board Vetoes Offer by Golden West : Banking: Battle for troubled thrift could intensify as pressure is exerted on its investors.

The board of California Federal Bank in Los Angeles has unanimously rejected a merger proposal from Golden West Financial, parent of Oakland-based World Savings, saying a conditional offer of about $600 million was not high enough.

Undeterred, Golden West Financial Chairman Herb Sandler met in New York late Thursday with major CalFed shareholders to discuss a possible tender offer, in an apparent attempt to circumvent CalFed’s board. Results of the meeting could not be immediately learned.

Golden West’s overtures could be the opening skirmish in a major battle for control of CalFed, a troubled financial institution whose branch offices and deposits are attractive commodities in an industry consolidating at an accelerating pace.

If the two savings and loans did merge, they would create the second-largest thrift in the United States, with assets of more than $44 billion. World is currently the nation’s third-largest thrift, with assets of $28.4 billion; CalFed has $15.7 billion in assets, making it the country’s fifth-largest thrift.

In a letter to CalFed’s board dated Dec. 21, Golden West offered to pay book value of $21.50 a share for the company, minus adequate reserves for problem loans and expected losses in the fourth quarter.

At the time, Golden West estimated the offer was worth a maximum of about $625 million, including $90 million for preferred shareholders. But with CalFed’s expected loss of about $50 million in the fourth quarter and its bad loans subject to further write-offs, Golden West’s final offer would have been closer to $575 million or even lower, CalFed officials said Thursday.

One high-level source at CalFed called the Golden West offer “amateur hour� and nowhere near what the board thinks the thrift is worth. CalFed officials were upset that the offer included no premium for the thrift’s deposits or real estate that has been written down below market value.

Sandler called the meeting in New York in an attempt to prevail upon 10 institutional investors, who control nearly 50% of CalFed’s stock, to pressure the CalFed board into opening merger talks, sources said. Golden West officials, including Sandler, could not be reached for comment.

CalFed shares have risen in recent weeks on speculation that the thrift would either put itself up for sale or arrange a merger. CalFed shares rose $1.25 to close Thursday at $16.125 in New York Stock Exchange trading. Golden West shares rose 75 cents to $39.25.

World Savings is one of the only large S&Ls; to emerge mostly unscathed from the industry debacle of the 1980s. Sandler and his wife, Marion, the company’s president, consistently earn high marks from industry analysts for their efficient and disciplined management.

The Sandlers have a reputation for paying rock-bottom prices for acquisitions that have turned out to be big moneymakers, said Jonathan E. Gray, thrift analyst at Sanford C. Bernstein & Co. in New York.

CalFed is trying to right itself amid more than $800 million in problem loans. The company completed a $242-million restructuring in March and seemed to be on the road to recovery. But its losses in 1993 are likely to be about $140 million, including $91 million lost in the first nine months of the year.

On Wednesday, CalFed announced a plan to sell its 43 Florida branches and raise up to $300 million through stock offerings.