Washington Mutual Inc. was rumored Monday to be considering the purchase of Long Beach (Calif.) Financial Corp. a subprime mortgage lender.
Analysts and executives of competitng firms said Washington Mutual, the nation's largest thrift, based in Seattle, may buy Long Beach, which made $752 million in loans during the first quarter, a 53% increase from a year ago.
Shares of Long Beach slipped 12.125 cents, to $12.125 Monday, while many financial stocks fell sharply. Long Beach shares were up 25% since April 1. Washington Mutual shares fell $1.375, to $38.875.
Analysts said Long Beach could sell for $17 a share-about $380 million- if it fetches the same multiple of earnings as Headlands Mortgage, which was sold last year to Greenpoint Financial Inc.
Executives from both companies declined to comment.