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U.S. private equity firm TPG and other investors are near a deal to invest around $5 billion in U.S. thrift Washington Mutual, a source familiar with the situation said.
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The Wall Street Journal said the other investors include large shareholders of the Seattle-based lender and may also involve other buyout firms, but noted that an agreement was yet to be finalized. (Video: CNBC's David Faber discusses the implications of a potential cash infustion)
According to the report, the investment looks like it could be both a common- and preferred-stock offering, adding that the preferred stock could be later converted to common shares, subject to a shareholder vote.
Also, TPG is expected to get a seat on the company's board, the WSJ said.
The U.S. government was not directly involved in shaping the deal, though banking regulators were likely made aware of WaMu's plans, the Journal said, citing sources familiar with the matter.
The plan sets aside the possibility of JPMorgan Chase [JPM
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] potentially buying Washington Mutual at least for now, the report said.
JPMorgan made a preliminary offer for Washington Mutual after studying its financial state since March, but talks between the two firms stopped last week, the Journal said, quoting a person familiar with the situation.
Washington Mutual [WM
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], the largest U.S. savings and loan, has suffered heavy losses from the national mortgage crisis.
In January, the lender said it expected to set aside as much as $2 billion for credit losses in the current quarter.
A Washington Mutual representative was not immediately available for comment.
Thrifts -- so named because they originally offered only savings accounts -- have evolved into offering a range of financial products and make business and consumer loans as well as residential mortgages.
The thrift crisis of the 1980s closed many of them and their number has continued to decline as differences have narrowed between them and banks.
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