West Palm Beach (HedgeCo.Net) – Private equity firm TPG Inc. is considering a $5 billion investment in Washington Mutual. Talks have been intense, and the two parties are expected to reach an agreement within the next few days according to the Wall Street Journal.
This comes at a time when banks are desperate for outside investors after reporting over $230 billion in losses related to the subprime mortgage crisis. Washington Mutual has written down $3 billion of that number.
TPG would purchase both common and preferred shares of WaMu, according to rumors. In addition, TPG co-founder David Bonderman would most likely get a seat on the board. They are reportedly seeking $15 billion to launch a new fund.
Washington Mutual is the largest U.S savings and loan institution in Washington. The fourth quarter marked their first reported loss since 1997. The bank also said that it will have to put aside almost $2 billion in provisions for the first quarter.
Wamu stock rose to over $13 a share yesterday after the news.
Julie Scuderi
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