WaMu Looks to Private Equity as Bank Teeters

Blackstone, Carlyle in talks after overtures to other banks flop
By Jason Farago,  Newser Staff
Posted Sep 25, 2008 8:52 AM CDT
Washington Mutual is in talks with several private equity firms about a takeover. The troubled bank has failed to find a buyer among its competitors.   (AP Photo/Nick Ut)
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(Newser) – Washington Mutual is hoping private equity will save the bank after its efforts to broker a sale to another financial institution came to nothing. Both the Carlyle Group and Blackstone are considering a takeover of WaMu, insiders tell the Wall Street Journal, although a deal is not yet assured. Many banks, from Santander in Spain to JPMorgan Chase and Citibank, have been reluctant to take on WaMu's troubled loans.

Federal regulators are pushing hard for a sale, which might receive government assistance. But laws limit the ownership of banks by non-bank entities such as private equity firms, and it remains unclear how a WaMu takeover would be structured. Yesterday Standard and Poor's cut its ratings on WaMu's debt into junk territory, as fears grew that any sale might not involve the whole company.