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September 18, 2008 4:52 PM

Which Firm Might Be on a Potential WaMu Sale?

Posted by Zach Lowe

On Tuesday we asked which firms stood to lose litigation work if Washington Mutual collapsed. Now, with word that WaMu is on the auction block, it's time to ask a different question: Who's advising them on a possible sale to JPMorgan Chase, Wells Fargo, or other potential suitors?

All signs would point to Simpson Thacher & Bartlett and partner Lee Meyerson. The firm--and Meyerson--have represented WaMu on all but one of the thrift's major corporate transactions since 2004.

Meyerson did not return calls or e-mails seeking comment. A firm spokesperson did not answer questions about the matter. A lawyer inside Simpson would say only that the firm "continues to represent WaMu."

Simpson has represented WaMu in several recent high-profile deals, including:

• WaMu's $6.45 billion acquisition in 2005 of Providian, a Bay Area credit card issuer known for issuing cards to subprime borrowers. Experts said the deal expanded WaMu's growing credit card business.

• The bank's $1 billion buy of Irvine, Calif.-based Commercial Capital Bancorp in 2006. WaMu said at the time that the deal would strengthen its overall banking business.

• WaMu's decision in April to sell more than $7 billion in equity to a group of investors led by Fort Worth-based TPG. WaMu needed the cash badly after losses related to subprime loans cost the company billions and slashed its market value by 74 percent, Bloomberg reported in April.

That TPG deal is back in the news this week, because TPG waived a key clause in the deal to help a possible WaMu sale go forward, according to several news reports. Thanks to a so-called dilution clause, TPG had the right to demand an undisclosed sum from any WaMu buyer. TPG waived that clause Wednesday.

More recently, Heller Ehrman advised WaMu in its issuance of covered bonds in August. With talks of dissolution at Heller, it comes as no surprise that a partner there says the firm is playing no role in any WaMu sales talks.

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