Washington Mutual sells Advisors unit for $740 million

Washington Mutual said Tuesday it agreed to sell its WM Advisors asset management unit to Principal Financial Group for $740 million.

Seattle-based Washington Mutual said it should record a pretax gain of at least $650 million from the sale, expected to close in the fourth quarter. Spokesman Alan Gulick said WM Advisors has about 200 employees, including 50 in Seattle, and Principal Financial is expected to retain "the vast majority."

WM Advisors, which creates and runs mutual funds, manages $26.4 billion in assets. WaMu will still offer investments through WM Financial Services.

Des Moines-based Principal, one of the biggest sellers of 401(k) retirement plans, had $205.3 billion of assets under management as of March 31.

CDC withdraws bid for company

CDC withdrew its hostile bid for Onyx Software on Tuesday, saying it was "extremely unlikely" the Bellevue company's board would ever accept it.

Onyx, a maker of customer-management programs, agreed June 6 to be acquired for about $92 million, or $4.80 a share, by M2M Holdings.

On June 20, Hong Kong-based CDC, operator of the China.com Web site, offered $5 a share for Onyx. It was CDC's third show of interest: In December, CDC bid $50 million for a majority stake in Onyx, and in March CDC said it would pay $4.78 a share in cash and stock.

2 stores to open in Seattle this year

San Francisco-based Gap said Tuesday that it would open two Forth & Towne stores in the Seattle area this fall. The new women's apparel concept caters to women 35 and older — an increasingly important demographic for fashion retailers.

Forth & Towne plans to open 12 stores this year in five new markets. In addition to Seattle, they include Atlanta, Houston, Los Angeles and the San Francisco/San Jose area.

GarageBand.com

Music startup gets $2.5 million boost

A new digital-music startup with roots at Microsoft has received $2.5 million in equity financing. Investors in San Francisco-based GarageBand.com include well-known venture capitalist Vinod Khosla and MTV co-founder Bob Pittman.

The venture is being headed by Hadi Partovi, who resigned as manager of the MSN portal and content group last October, and his twin brother, Ali. The company is readying a software application and service called iLike for media-player systems.

Struggling bank posts a profit

Federal Home Loan Bank of Seattle reported a profit of $2.5 million for the second quarter, an improvement from a loss of $15.7 million during the same quarter last year. The bank, which makes low-rate loans to financial institutions, struggled through much of 2004 and 2005 and is now operating under a written agreement with its regulator that is meant to mitigate risk and improve earnings.

Existing-home sales continue decline

Sales of existing homes fell in June for the eighth time in the past 10 months while home prices edged up at the slowest pace in more than a decade — more signs that the housing market has slowed dramatically.

The National Association of Realtors reported Tuesday that sales of previously owned homes and condominiums dropped 1.3 percent in June to a seasonally adjusted annual rate of 6.62 million units.

The median price of a home sold last month was $231,000. That was up 0.9 percent from June 2005 and represented the smallest year-over-year price gain since May 1995.

By region of the country, sales fell 3.5 percent in the Northeast and 2.3 percent in the South last month. Sales were unchanged in the West and the Midwest.

The inventory of unsold homes rose to a new record of 3.725 million units, which is a 6.8 months supply at the June sales pace. That is the longest period required to exhaust the overhang of unsold homes in nearly nine years.

Compiled from Seattle Times staff, The Associated Press, Reuters and Bloomberg News