JP Morgan (JPM) Mulling Wachovia (WB) Bid

Jamie Dimon and JP Morgan are considering making a bid for Wachovia, says a CNBC source:

The possible deal fits nicely into JPMorgan’s game plan as publicly stated by Dimon, which is to expand the firm’s commercial bank, particularly in the Southeast. Even with $30 billion in bad loans, Charlotte, N.C.-based Wachovia could fetch around $39 a share, says Deutsche Bank analyst Mike Mayo.

But the deal wouldn’t be a lay up. If JP Morgan bought Wachovia, it would exceed the federal deposit cap that forbids any one entity controlling more than 10% of U.S. deposits. JPM owns 7%, Wachovia owns 6%. There are ways around the cap, however, say bank analysts, and with WB’s stock demolished, JPM might bite.

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