New York (HedgeCo.Net) – A $7.2 billion bailout package was approved Tuesday by 94% of Washington Mutual Shareholders in a move that gives private equity firm TPG control of over 50% of the company, says the Seattle Times.
Not that there was much of an alternative. The other option would come in the form of a $792 million dividend that WaMu would have to pay the company, with increasing payments ahead. Though that didn’t stop protesters led by the Service Employees International Union to emphasize that this was a “toxic deal.”
The Union also stated that the private equity firm would seek high profits in the short term and “squeeze these returns from troubled banks through higher fees for bank customers, unfair lending practices and exorbitant interest rates on credit cards and other consumer products.”
In April, TPG bought 176 million shares of WaMu at $8.75 each, a 33% discount at the time.
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