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Ailing bank Washington Mutual Inc. appeared headed toward a sale Wednesday after a major investor removed a potential stumbling block and nervous banking regulators began approaching the most logical buyers.
The New York Times, citing unidentified people familiar with the matter, said an auction of the bank was already under way, and The Wall Street Journal reported Wells Fargo & Co. and Citigroup Inc. expressed interest in a takeover.
Gambling911.com has reported extensively in recent weeks on Washington Mutual and its strong likelihood of failing before year's end based on prediction market betting.
30 percent of those placing bets at financial prediction market, intrade.com, at the start of this week believed that Washington Mutual would fail by year's end.
Following the A.I.G. bailout Wednesday and numerous news reports that Washington Mutual was in serious trouble, wagering action indicated a 60 percent chance of the bank failing within a very short period of time.
A concession by investment firm TPG, which injected $7 billion into WaMu five months ago, may have opened the way to a sale - or, failing that, made it easier for the bank to raise another round of capital.
TPG could have stymied the process because of protection when it bought its stake in April. A clause in its agreement could have required a buyer or another major investor to pay TPG hundreds of millions, if not billions, of dollars in addition to whatever money was injected into WaMu.
But TPG agreed to waive the clause after concluding WaMu needs all the help it can get.
"It became clear that it would be in the best interests of Washington Mutual and our investors to waive the ... provisions," Fort Worth, Texas-based TPG said in a statement. "Our goal is to maximize the bank's flexibility in this difficult market environment."
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Jagajeet Chiba, Gambling911.com
