Shares of Washington Mutual moved higher today on renewed speculation the troubled Seattle-based lender may be bought out. CNBC reported, without citing...
Shares of Washington Mutual moved higher today on renewed speculation the troubled Seattle-based lender may be bought out.
CNBC reported, without citing sources, that WaMu in “very preliminary talks” with JPMorgan Chase. “No deal is imminent but the talks were held fairly recently,” the cable channel said.
In the close of trading on the New York Stock Exchange, WaMu shares were up 53 cents, or 3.7 percent, to $14.69. The shares had traded as high as $15.27 earlier in the day.
Morgan has long been rumored to be interested in WaMu, primarily for its extensive branch network. The New York bank, which has been burned less by the mortgage debacle than many of its peers, wants to expand in faster-growing parts of the country such as the West and Southeast, Morgan executives have said.
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WaMu, meanwhile, has been battered by the nationwide housing slump and the collapsed value of many of the mortgage-backed securities the bank originates for sale or holds for its own portfolio.
Through the third quarter of 2007, WaMu had set aside $1.57 billion to cover loans gone bad. It has said it will set aside at least another $1.5 billion for the fourth quarter, and up to $8 billion this year.
Over the past 12 months, shares of WaMu have tumbled by more than two-thirds, increasing speculation the company could become a takeover target.
Those rumors were given greater force Thursday, as word spread that Bank of America was negotiating to buy Countrywide Financial — an even more troubled mortgage lender.
But mortgage-industry investors hoping for a takeover premium likely will be disappointed. When the official word came today that BofA was indeed buying Countrywide, the price tag was just $4 billion or $7.16 a share — 7.6 percent below Countrywide’s closing price Thursday. Countrywide closed down $1.42, or 18.3 percent, to $6.33.
Drew DeSilver: 206-464-3145 or firstname.lastname@example.org