Washington Mutual to get $5 bln from TPG

U.S. private equity firm TPG and other investors are near a
deal to invest $5 bln in Washington Mutual Inc, the Wall Street Journal
reported on its Web site, citing people familiar with the matter.

The other investors include large shareholders of the
Seattle-based lender and may also involve other buyout firms, the Journal said,
but noted that an agreement was yet to be finalized.

According to the report, the investment looks like it could
be both a common- and preferred-stock offering, the report said, 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 U.S.
government was not directly involved in shaping the deal, though banking
regulators were likely made aware of Wampum’s plans, the Journal said, citing
sources familiar with the matter.

The plan sets aside the possibility of JPMorgan Chase
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, 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 bln
for credit losses in the current quarter.

A Washington Mutual representative was not immediately
available for comment.