This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

WaMu Deal Could Take Time

Updated from Monday, Sept. 22

Investors at Washington Mutual (WM - Get Report) are growing increasingly anxious about the fate of the ailing bank, but a resolution could still be some days away.

Washington Mutual shares slumped 20% on Monday, following a Wall Street Journal report that the nation's largest thrift is being pressured by regulators to either sell itself or recapitalize. The Financial Times on late Monday reported that the Office of Thrift Supervision was pushing for a quick resolution to the situation. The regulator could push to broker a deal to split WaMu's assets -- both good and bad -- among several banks.

But as the federal government makes headway on a plan to buy up to $700 billion in bad mortgage assets, potential WaMu suitors may prefer to wait until the plan is more formalized before making a deal, some analysts and other banking industry veterans say.

"The bailout plan made WaMu a more viable acquisition candidate," says Howard Shapiro, an analyst at Fox-Pitt Kelton Cochran Caronia Waller. "If the government takes some of the worst assets then what you're left with is a very attractive branch network and cleaner balance sheet."

Shapiro says there is no immediate risk to WaMu in the next few months and there is time for the government bailout plan to take shape. He says potential buyers likely want to see what exactly would remain on WaMu's books.

"If I were a buyer, I would wait until I have more clarity," he says.

Toronto-Dominion (TD) is among the companies now weighing a bid for WaMu, the Wall Street Journal reports Tuesday, citing people familiar with the situation.

Last week the Seattle thrift had been reported to put itself on the auction block, with suitors such as Citigroup (C - Get Report), JPMorgan Chase (JPM - Get Report), Wells Fargo (WFC - Get Report) and Banco Santander (STD) considering a deal, reports say.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
C $52.90 0.00%
JPM $62.60 0.00%
WB $17.20 0.00%
WM $52.66 0.00%
WFC $54.70 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs