WaMu's top shareholder lifts obstacle to a sale

Washington Mutual's largest single shareholder, private-equity firm TPG, today removed a potential roadblock to a potential acquisition of the ailing thrift.

TPG, which led a consortium that infused $7.2 billion into Seattle-based WaMu in April, agreed to waive a provision in its investment agreement that would have forced WaMu to pay hundreds of millions of dollars in the event of a sale at today's rock-bottom stock price.

The development comes as federal regulators reportedly are shopping around WaMu, which has been hobbled by its deeply troubled mortgage business, to potential buyers,

Back in April, the TPG-led group paid $8.75 a share for stock and warrants potentially worth more than half the company. But WaMu shares have gone nowhere but down since then. They closed today at $2.01, down 31 cents, or 13.4 percent.

The deal with TPG provided that, if WaMu sold more than $500 million of new stock — or the entire company — for less than what the TPG investors paid, WaMu would have compensate them with hundreds of millions of dollars in either cash or yet more new stock.

Speculation about WaMu's fate has intensified to a fever pitch in recent days, given Lehman Brothers' bankruptcy filing, Bank of America's purchase of Merrill Lynch, and the de facto federal takeovers of Fannie Mae, Freddie Mac and insurance giant AIG.

Companies that reportedly have been approached by regulators about buying WaMu include JPMorgan Chase, Wells Fargo and HSBC.

Chase offered to buy WaMu for $8 a share earlier this year, a deal former CEO Kerry Killinger passed up in favor of the TPG investment. Killinger had hoped the $7.2 billion from the TPG-led group would be enough to see WaMu through the turmoil sweeping through the U.S. financial sector.

But Killinger was ousted almost two weeks ago and replaced by Alan Fishman, a hard-nosed veteran banking executive from Brooklyn with experience in both buying and selling banks.

Drew DeSilver: 206-464-3145 or ddesilver@seattletimes.com