JPMorgan Chase May Acquire Washington Mutual After FDIC Seizure
Sept. 25 (Bloomberg) -- Washington Mutual Inc. may be seized by regulators later today and parts sold to JPMorgan Chase & Co. in what will rank among the biggest banking failures in U.S. history.
The Federal Deposit Insurance Corp. plans to take control of Seattle-based WaMu, the biggest U.S. savings and loan, according to the CNBC television network, and New York-based JPMorgan will buy deposits and branches, the Wall Street Journal said, without citing any sources. The FDIC insurance fund is not expected to contribute any money, the Journal said.
WaMu's fate played out as Congress tried to reach an accord that will ease the global credit crunch, which has already driven Lehman Brothers Holdings Inc. and IndyMac Bancorp out of business, and Bear Stearns Cos. and Merrill Lynch & Co. into hastily arranged rescues. As many as five banks had considered bids for WaMu without making an offer, balking in part because the lender faced as much as $19 billion in mortgage loan losses.
Resolving WaMu's situation ``is a positive,'' said Patrick Becker Jr., who oversees $2 billion as chief investment officer at Becker Capital Management in Portland, Oregon. ``That's been a big cloud over the market and financial shares.'' His firm does not own JPMorgan or WaMu shares.
WaMu and JPMorgan officials didn't return calls seeking comment.
Five banks that were considering bids, including JPMorgan Chase & Co., have failed to make an offer in the week since WaMu put itself up for sale. WaMu also approached Carlyle Group and Blackstone Group LP, two people briefed on the matter said.
Deal Pressure
WaMu came under increasing pressure to strike a deal as its stock sagged and ratings companies pummeled its debt. Standard & Poor's yesterday cut WaMu's rating for the second time in nine days, dropping it to CCC from BB-. WaMu's regulator, the Office of Thrift Supervision, and the Federal Deposit Insurance Corp., which guarantees customer deposits, have declined to comment.
WaMu fell 57 cents, or 25 percent, to $1.69 at 4 p.m. in New York Stock Exchange composite trading. The stock skidded about 88 percent this year, the biggest decline in the 24- company KBW Bank Index. WaMu is the only junk-rated company in the index.
A record 392 million WaMu shares changed hands today, more than twice the daily average this month and seven times the average over the past year, Bloomberg data show.
http://www.bloomberg.com/apps/news?p...4CY&refer=home
The Federal Deposit Insurance Corp. plans to take control of Seattle-based WaMu, the biggest U.S. savings and loan, according to the CNBC television network, and New York-based JPMorgan will buy deposits and branches, the Wall Street Journal said, without citing any sources. The FDIC insurance fund is not expected to contribute any money, the Journal said.
WaMu's fate played out as Congress tried to reach an accord that will ease the global credit crunch, which has already driven Lehman Brothers Holdings Inc. and IndyMac Bancorp out of business, and Bear Stearns Cos. and Merrill Lynch & Co. into hastily arranged rescues. As many as five banks had considered bids for WaMu without making an offer, balking in part because the lender faced as much as $19 billion in mortgage loan losses.
Resolving WaMu's situation ``is a positive,'' said Patrick Becker Jr., who oversees $2 billion as chief investment officer at Becker Capital Management in Portland, Oregon. ``That's been a big cloud over the market and financial shares.'' His firm does not own JPMorgan or WaMu shares.
WaMu and JPMorgan officials didn't return calls seeking comment.
Five banks that were considering bids, including JPMorgan Chase & Co., have failed to make an offer in the week since WaMu put itself up for sale. WaMu also approached Carlyle Group and Blackstone Group LP, two people briefed on the matter said.
Deal Pressure
WaMu came under increasing pressure to strike a deal as its stock sagged and ratings companies pummeled its debt. Standard & Poor's yesterday cut WaMu's rating for the second time in nine days, dropping it to CCC from BB-. WaMu's regulator, the Office of Thrift Supervision, and the Federal Deposit Insurance Corp., which guarantees customer deposits, have declined to comment.
WaMu fell 57 cents, or 25 percent, to $1.69 at 4 p.m. in New York Stock Exchange composite trading. The stock skidded about 88 percent this year, the biggest decline in the 24- company KBW Bank Index. WaMu is the only junk-rated company in the index.
A record 392 million WaMu shares changed hands today, more than twice the daily average this month and seven times the average over the past year, Bloomberg data show.
http://www.bloomberg.com/apps/news?p...4CY&refer=home
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