Reader Dwight pointed out this amusing disparity in reporting. The Financial Time is definitive, It title: “No bidders come for Washington Mutual“:
Hopes of finding a buyer for Washington Mutual dimmed on Thursday as an auction for the beleaguered US bank had yet to attract any bids…
Goldman has approached a number of banks, including Citigroup, JPMorgan Chase and Wells Fargo, according to people close to the situation.
The banks declined to comment, but people close to the talks said JPMorgan was not planning to bid for WaMu, while San Francisco-based Wells Fargo generally focuses on small acquisitions. Citi is also believed to be wary of expanding its US retail operations.
Fred Cannon, analyst at Keefe, Bruyette & Woods, said that while WaMu’s franchise and retail branch network on the west coast of the US made it an attractive prospect for banks such as JPMorgan, a buyer would have to take up to a $37bn accounting hit from the deteriorating mortgage portfolio.
The lack of interest means that Goldman may soon have to evaluate other options for the bank. These could include raising capital by selling off the attractive assets, which would still leave WaMu holding the mortgage portfolio, or raising fresh capital to allow the bank to stand alone – a challenge in the current environment.
The Bloomberg headline? “WaMu Said to Attract Multiple Potential Bidders“;
Washington Mutual Inc., the savings and loan that put itself up for sale this week after the stock tumbled, has attracted several potential bidders for all or part of the bank, a person familiar with the matter said.
The person declined to identify the companies. JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. may bid for WaMu, three other people with knowledge of the talks said earlier…..
“Everybody wants the West Coast depository,” said Fred Cannon, an analyst at KBW Inc. in San Francisco who rates WaMu “market perform.” “They all have one problem, which is the same questionably valued assets. JPMorgan is in a position of pretty good strength. It would be a market expansion for their branch footprint.””:
Recall the reporting of multiple parties allegedly interested in buying Lehman, when none came forward. I tend to be skeptical of reports of interest until there are signs deal discussions are on. But in this case, who knows?
Update 9/19, 12:05 AM: Seems the usually reliable FT has a bit of egg on its face. It now has an article titled “Five banks exploring WaMu records“:
Five banks have come forward to evaluate Washington Mutual’s financial records as part of an auction process run by WaMu’s adviser, people familiar with the matter said on Thursday.
WaMu shares rose 14 per cent on Thursday after news it had put itself up for sale. The five banks that have looked through the WaMu materials include JPMorgan Chase, Wells Fargo, Citigroup, HSBC and Banco Santander, the people familiar said. It was unclear whether any of them intended to make an offer for WaMu.
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Perhaps there are no bidders for Wamu as a company but multiple bidders for its branches and deposits.
ft has changed their story to match bloomberg
Re: Contradictory Reports
The reason for the contradiction may have something to do with the delayed memo that said all news from now on will be good news, so I would take any confusion with a grain of salt, because the good news is priced in and all is well!
The second headline is artful. There is no contradiction.
If this is the last night to make comments about wall street or washington, I just wanted to say that Yves has done a great job here and I wish her well going forward and I hope your able to find warmth and things to eat, where ever they may send you! This was a good time, maybe the best of times:
It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.
an analyst at KBW Inc. in San Francisco who rates WaMu “market perform.”
The joke makes itself. Several jokes, actually.
It strikes me that if we end up with all of the investment banks merged into commercial banks, and all of these mammoth financial services entities swallowing up each other until there are only a handful left, that:
1. the chances of undoing Gramm-Leach-Bliley and re-instating Glass-Steagall becomes nonexistent
and
2. the chance of imposing any sort of “too big to fail = too big to exist” legislation becomes nonexistent
and we end up stuck with an extreme amount of market concentration in banking, thus setting the stage for the next crisis.
Those damn shorts!
>> US companies are facing fresh pressure from regulators and shareholders to rein in excessive executive pay as research shows chief executives have been paid up to 10 times more than their top lieutenants.
The average total compensation for a S&P 500 chief executive was about twice as much as the second most highly paid executive last year, according to a study conducted for the Financial Times by the research group, Salary.com.
However, at SLM, the student loan group known as Sallie Mae, the pay of Thomas Fitzpatrick, chief executive, who resigned in May, was more than 10 times that of June McCormack, his executive vice-president.
At more than 30 other companies, the gap ranged from four times to seven times.
I think Anonymous 7:07PM has it. There are no bidders for WaMu as a whole, but there are “interested parties” for the branch and deposit franchise who would bid if the credit quality issue could be taken off the table (Hanky Bernanke!!). When coupled with a black hole of credit risk, even the most attractive deposit franchise is untouchable.
Nobody in there right mind would buy Wamu as is. First, who would want mgmt headache of dealing with inevitable legal tussles resulting from Wamu’s aggressive dealings during the go-go days. Second, why pay a couple of billion and be stuck with toxic waste when you can wait and cherrypick like Barclays did with Lehman?
Nobody in there right mind would buy Wamu as is.
By buying WaMu the buyer qualifies for the Too-Big-to-Fail Federal Program (TBFFP).