Washington Mutual shareholders approved a $7 billion infusion from TPG and other investors yesterday, thereby blessing — they had little choice — the return of Texas deal maker David Bonderman to the company’s board of directors. The decision came on a day when WaMu stock hit a 16-year low.
TPG co-founder Bonderman, who started his investment career with Robert Bass in Fort Worth, has made it clear that his interest in Washington Mutual is long term.
“Where WaMu gets to is more important than when it gets there,” he told the Financial Times last week. “This is the strength of private equity. We can be patient.”
Analysts estimate that the Seattle-based lender faces billions more in loan losses over the next few years.
Bonderman’s first tour of duty on the WaMu board ran from 1997 to 2002 after Washington Mutual bought American Savings & Loan. Bonderman had been with the Robert M. Bass Group when it bought the insolvent S&L from the federal government in 1988.
The TPG deal with WaMu was announced in April. Gretchen Morgenson, writing in The New York Times, has called it a “sweet package” for TPG and other investors, even though the price of WaMu stock has declined since the deal was made.
In the FT article, reporter Henny Sender called Bonderman and his TPG partner, James Coulter, “probably the most successful-ever private equity investment team.” Last year, TPG completed the buyout of TXU, one of the largest electric utilites in the United States. Sender’s article is worth reading just for the anecdote about how Bonderman’s partners have “banned him from setting foot in Japan.”
Bonderman’s position on the WaMu board gives it a decidedly North Texas tilt. Director Tom Leppert is the mayor of Dallas and Regina Montoya lives in Dallas. Bonderman lives in Fort Worth.
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