Savings and loan bank Washington Mutual, Inc is on the verge of securing a $5 billion investment from private equity buyout group TPG and other investors after suffering big losses in recent months due to the current credit crisis.
The deal would give TPG, previously known as Texas Pacific Group, a package of common stock and preferred shares amounting to less than 25 percent stake in Wamu, the Wall Street Journal reported on Monday citing an unnamed source.
The Seattle-based firm shed almost 70 percent of its market value last year due the credit and housing downturns which have gripped the U.S. since August of last year. In fourth quarter of 2007, WaMu had a loss $1.87. As of last Friday, the bank was valued at $9 billion.
As a result of the poor showing, WaMu recently eliminated 3,000 jobs, cut its dividend and raised $3.7 billion in capital.
The company's shares rose $2.94, or 28.91 percent to close at $13.11 in regular trading today.