J. Christopher Flowers of J.C. Flowers & Co. LLC;
Steven Mnuchin,
chairman of Dune Capital Management LP; and John Paulson of hedge fund
Paulson & Co. are partnering up to purchase the bank, according to
The Wall Street Journal. The deal could be worth around $14 billion. At the time of its failure,
IndyMac Federal Bank FSB had $32 billion in assets and $19 billion in deposits.
To complete the transaction, the three private equity players might create a company called HoldCo LLC and convert IndyMac from a mutual savings bank to a stock-held institution, according to
The Wall Street Journal.
Previously, private equity firms weren't allowed to hold more than 24.9% of a bank without becoming a bank holding company and facing the investment restrictions that come along with that status.
In September, the Federal Reserve eased regulations to allow private
equity firms and hedge funds to acquire larger portions of bank holding
companies, but
so far many private equity firms have taken only minority positions.
If the IndyMac deal is completed, it could pave the way for many more such deals. - Maria Woehr
Federal regulators could announce a sale of failed mortgage lender IndyMac Federal Bank as soon as Wednesday. If the deal does go through, it could mean that regulators are willing to ease up on some strict banking rules, allowing private equity firms to own big banks.
