By Devika Patel
Knoxville, Tenn., April 11 - Washington Mutual, Inc. revealed further details regarding a $7.2 billion private placement of common stock and contingently convertible, perpetual non-cumulative preferred stock in an 8-K filed Friday with the Securities and Exchange Commission.
The securities were sold to an investment vehicle managed by TPG Capital and to other investors, including many of WaMu's top institutional shareholders. TPG's investment vehicle, as anchor investor, bought $2 billion of the securities.
The company sold 56,570 series T contingent convertible perpetual non-cumulative preferred shares at $100,000 per share for $5.66 billion. The convertible preferred stock will automatically convert into common stock at an initial exercise price of $8.75 per share, after the company obtains certain approvals, including shareholder approval.
WaMu also sold 176,337,142 common shares at $8.75 per share for $1.54 billion.
In addition, certain investors who agreed to transfer restrictions on their shares will receive warrants, which, after obtaining certain approvals, will become exercisable for common stock based on a post-closing reference price. These warrants have a term of five years and an exercise price equal to the lower of 115% of the average closing price of the company's common stock for the five trading-day period following the public announcement of the company's results for the first quarter of 2008 and $10.06. The warrant exercise price will be reduced by $0.50 on each six-month anniversary of the issue date of the warrants, with a maximum reduction of $2.00, if certain shareholder or other approvals relating to the exercise of the warrants are not obtained.
TPG bought 822,857 of the common shares for $7.2 million, 19,928 of the series T contingent convertible perpetual non-cumulative preferred shares for $1.99 billion and received warrants for 57,142,857 common shares.
Based in Seattle, WaMu is a retailer of financial services to consumers and small businesses.
| Issuer: | Washington Mutual, Inc.
|
| Issue: | Series T contingent convertible perpetual non-cumulative preferred stock, common stock
|
| Amount: | $7,199,949,992.50
|
| Warrants: | For certain investors
|
| Warrant strike price: | Lower of 115% of the average closing stock price for the five trading-day period following first-quarter results and $10.06; reduced by $0.50 on each six-month anniversary of warrant issue date, with maximum reduction of $2.00, if approvals not obtained
|
| Warrant expiration: | Five years
|
| Investors: | An investment vehicle managed by TPG Capital (for $2 billion)
|
| Settlement date: | April 8
|
| Stock symbol: | NYSE: WM
|
| Stock price: | $13.15 at close April 7
|
|
|
| Preferreds
|
| Amount: | $5,657,000,000
|
| Shares: | 56,570
|
| Price: | $100,000
|
| Conversion price: | $8.75
|
|
|
| Common shares
|
| Amount: | $1,542,949,992.50
|
| Shares: | 176,337,142
|
| Price: | $8.75
|
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