Washington Mutual (WM) has turned to private equity groups in its ongoing bid to save itself. With JP Morgan (JPM), Citigroup (C), Wells Fargo (WFC), Banco Santander (STD), and Toronto-Dominion Bank (TD) all showing only tepid interest, WaMu is now shopping itself to Carlyle Group and Blackstone (BX). WSJ:
Among the private-equity firms that are considering a possible transaction are Carlyle Group LLC and Blackstone Group LP, these people said. The two firms would team up with Texas billionaire and longtime bank investor Gerald J. Ford. Mr. Ford reaped huge profits on Golden State Bancorp, a California thrift sold to Citigroup Inc. for $5.8 billion in 2002.
It isn’t clear if those discussions will result in a deal, and WaMu is plowing ahead with other efforts that include a sale to another financial institution.
….WaMu declined to comment. People familiar with the thrift said it is pursuing a wide range of options, including a capital infusion, sale and government-assisted transaction. WaMu has more than $300 billion in assets and more than 2,200 branches.
The push comes amid pressure from federal regulators, who are actively involved in the process. Regulators are continuing to solicit interest in a potential government-assisted transaction.
Private-equity firms could demand that existing equity holders in WaMu be wiped out as a condition for any deal. If so, that could be a blow to private-equity firm TPG, which led a $7 billion infusion at WaMu in April.
It also isn’t clear how a private-equity deal for WaMu would be structured, partly because federal rules limit ownership of banks and thrifts by nonbank entities.
WaMu shareholders wiped out? Shouldn’t come as much of a surprise by now. Let the final countdown to zero commence.
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