Washington Mutual Begins Efforts to Sell Itself (Eric Dash, Andrew Ross Sorkin,Michael de la Merced)

Created by : Airlight View profile

WaMu

Washington Mutual, the struggling savings and loan, has been working on several efforts to save itself, including a potential sale, people briefed on the matter said Wednesday.

The unsurprising announcement comes as the bank, which has suffered badly from losses on mortgages it had made, continues to stumble. Shares in Washington Mutual fell nearly 10 percent on Wednesday to $2.09; they have plunged 94 percent over the last 12 months. This week alone, investors have been frightened by Standard & Poor’s cutting of the bank’s debt rating to junk.

Goldman Sachs, which Washington Mutual has hired, started the auction several days ago, these people said. Among the potential bidders that Goldman has talked to are Wells Fargo, JPMorgan Chase and HSBC.

TPG, the private equity firm that led a $7 billion cash injection into Washington Mutual in April, said Wednesday afternoon that it would waive its right to be compensated if the bank sold more shares to raise capital. “Our goal is to maximize the bank’s flexibility in this difficult market environment,” TPG said in a statement.