The ongoing credit crunch was coming to a head Friday as former giants of the financial-services industry, now battered into submission, were forced into taking the sellout route.
The pulped Countrywide ( CFC), for instance, will indeed sell itself to Bank of America ( BAC). As disclosed this morning, BofA agreed to pay around $4 billion for the nation's biggest mortgage lender, or 0.1822 BofA shares for each Countrywide share. Back in August, BofA helped buoy the firm a bit by buying nonvoting convertible preferred Countrywide stock worth $2 billion. The buyout's per-share dollar amount comes to $7.16, well below yesterday's tremendous $7.75 finish -- a 51% spike spurred by The Wall Street Journal's merger story break. That closing price, moreover, had essentially represented a return to relatively normal levels following the prior couple of days' massive losses, which were set off by bankruptcy rumors and word of more than doubled foreclosures in December. Accordingly, Countrywide shares were in retreat with a recent 16% loss at $6.51. Shares of BofA, which expects the deal to begin boosting earnings next year, were off 1.2% to 38.85. In another potential bombshell deal , the mortgage-heavy Washington Mutual ( WM) climbed after CNBC reported that the bank is in "very preliminary" takeout discussions with JPMorgan Chase ( JPM). Mortgage woes have had WaMu shares sliding steadily downward since the summer, especially since the dispatch of dismal third-quarter results in October and the following month's accusation , courtesy of New York Attorney General Andrew Cuomo, that it had schemed to inflate house appraisals . December's revelations of a capital-boosting dividend slashing and a stock offering didn't help, either.