Washington Mutual Inc., the largest U.S. savings and loan, may buy Dime Bancorp, New York's biggest thrift, for about $5 billion in cash and stock, the Wall Street Journal reported, citing unidentified sources.
The companies are discussing a tax-free transaction that wouldn't offer Dime shareholders much more than yesterday's closing share price of $38.08, the Journal reported.
Washington Mutual spokeswoman Libby Hutchinson declined to comment. Dime officials weren't immediately available.
If Washington Mutual buys Dime, it would gain 123 branches and $14 billion of deposits in New York and New Jersey after making acquisitions on the West Coast and in Texas and Florida over the past five years. It also would gain a mortgage lending operation, North American Mortgage Co., which has been Dime's fastest-growing business this year.
The discussions between Washington Mutual and Dime are at a delicate stage and may fall apart, the Journal reported, citing unidentified people familiar with the matter. Washington Mutual has tried to buy Dime in the past, although the two sides were never able to agree on terms, the Journal said.