Many readers have been intrigued by my recent posts (Will Chase (JPM) or Wells Fargo (WFC) buy WaMu (WM)? and Wells chasing Chase for WaMu -- Act II) regarding various strategic scenarios that might make sense for either J. P. Morgan Chase & Co. (NYSE: JPM) or Wells Fargo & Company (NYSE: WFC) to acquire Washington Mutual, Inc. (NYSE: WM).
If something is happening along these lines, it is all happening quietly behind closed doors. More than one reader suggested that no deal is possible because the Washington Mutual CEO, Kerry Kilinger, does not want to give up his throne and has too high an opinion of himself and the value of the company.
From my perspective this is a deal that has to get done, and if the CEO stands in the way of shareholder, employee, and customer interests he has to go. Time to bring in the corporate raiders -- you listening Carl Icahn; can a deal be done Norman Peltz? Hey Eddie, maybe you could make back the money you lost on Citigroup (NYE: C)! If there were ever a great opportunity this seems like it. The raiders do serve a market purpose.
There are potential buyers waiting in the wings so the raiders could move in friendly like, or do it the hard way, buying in at depressed stock prices, forcing Killinger into submission and doing a quick flip. I think even 'my pal Warren' of Berkshire Hathaway (NYSE: BRK.A), a major investor in Wells Fargo, must be doing some heavy duty pondering on the subject.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of BRK.B and WM.
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Reader Comments (Page 1 of 1)
3-01-2008 @ 12:10AM
Bob said...
This article sounds like it is coming from someone who bet on a buyout of WaMu...and when it didn't happen...is trying to create some appreciation to cover his bad idea.
3-01-2008 @ 9:10AM
John T said...
I absolutely agree with the prior comment. It appears as usual wall street types are looking for a bigger fool to unload a position.
3-01-2008 @ 10:30PM
LinStorer said...
The intelligence of WaMu management is in need of thorough scan. In the Loss and Mitigation department, the management will favor foreclosure in place of 73% recovery of the mortgage loss in the midst of mortgage meltdown. Go figure… Sell WaMu stocks!
3-02-2008 @ 12:16AM
Sheldon L said...
Bob & John,
Thanks for taking the time to comment. Your views are a bit cynical and do not address the actual facts. You also are not familiar with me or my approach to the stories I write. Furthermore, this Wall St. type is an architect in Calif. by profession.
But to enlighten, here is our exact position. We held WM in numerous portfolios for an average price of $39. We cleared out of all but one position at $36 and given the high dividend were probably very close to break even on the investment. We maintain the stock in one portfolio. The shares are a minor position.
I hope you will continue to read my posts and I look forward to more depth of thought in future comments - Peace