UPDATE 1-WaMu may seek merger as pressure mounts - Merrill

miércoles 17 de septiembre de 2008 17:17 CEST

(Recasts; adds analyst comments, background, share movement)

Sept 17 (Reuters) - Washington Mutual's (WM.N: Cotización) board would seriously consider a merger offer even at a discount to what the Seattle-based thrift believes it is worth, as it faces mounting pressure to pursue options amid credit-rating downgrades, an analyst at Merrill Lynch said.

"Recent markets disruption and lack confidence that Washington Mutual can withstand the credit cycle are increasing the likelihood that it will need to seek shelter from the storm through a merger," analyst Kenneth Bruce said in a note dated Sept 16.

Rating agency Standard & Poor's downgrade of the thrift to "junk" status, "is likely to add more impetus to Washington Mutual to act quickly," Bruce, who lowered his price target on the stock to $1 from $3, said.

The S&P downgrade came on Monday, and followed downgrades last week by Moody's Investors Service and Fitch Ratings.

S&P had expressed concern about the thrift's share price, and said "it increasingly appears that market conditions could overtake credit fundamentals and leave the company with greatly diminished financial flexibility."

Washington Mutual's stock has lost almost 94 percent of its value from its 52-week high of $39.25 on Sept. 19, 2007, to its close on Tuesday of $2.36, as investors worry about continued losses related to risky real-estate loans.

The company's woes has led to speculation that it is primed for a takeover.

On Wednesday the New York Post reported, citing sources, U.S. federal regulators recently called a number of banks asking if they would consider buying Washington Mutual should it eventually falter.   Continuación...