Wells Fargo & Co., which calls itself an opportunistic but cautious buyer with a special aversion to big, down-and-out banks, hinted this week it might break from that mold if it can buy all or part of a beleaguered company at a fire-sale price.

Wells chairman Dick Kovacevich, who is known to be more candid than most bank executives, said in a speech at the Association of Corporate Growth 2008 conference in Beverly Hills Wednesday that Wells might consider a bid on a weakened company at a steep discount, according to a report by San Francisco Business Times.

"Given the financial conditions today, I feel like a kid in a candy store," he was quoted as saying, without naming any possible targets. "There is a lot out there today."

Joe Garrett, a principal at Garrett, Watts & Co. in Berkeley, Calif., told American Banker, "If true, you'd have to view that as a big departure from the fill-in-deal mantra that Wells Fargo has had for as long as I can recall."

Joseph Morford at Royal Bank of Canada's RBC Capital Markets said a break from past norms might be in the cards for Wells. "I think they're going to look at all kinds of opportunities that come up," he said.

Wells would prove its approach has changed by making a bid for Washington Mutual Inc., observers said.

A source close to Wamu said that for the past week it has searched for an infusion of capital or a sale. It garnered interest this week from Wells, JPMorgan Chase & Co., and at least one other banking company, the source said. No deal appeared imminent at press time Thursday, but talks were thought to be ongoing and all prospective buyers involved have based their interest in part on federal authorities providing some form of assistance to sweeten any deal. Speculation pushed Wamu's shares up nearly 49% Thursday.

JPMorgan Chase, which has long coveted the large retail networks in Florida and California that a Wamu acquisition would provide, and which made a bid for Wamu earlier this year, has for several days topped most analysts' lists of contenders to buy Wamu. JPMorgan Chase said it does not comment on deal speculation. Wells, already huge in California, would likely have to divest dozens of Wamu branches if it were to buy the Seattle thrift company.

Until this week most observers did not see Wells as a serious contender for Wamu. Howard A. Atkins, Wells' chief financial officer, said in an interview with American Banker in January, when rumors surfaced that Wamu might approach Wells about a deal, "What we're interested in is very different than the type of fixer-upper transactions that other big banks are doing." (The interview took place days after Bank of America Corp. announced it was buying the troubled mortgage company Countrywide Financial Corp.)

Since January, Mr. Atkins and John G. Stumpf, Wells' chief executive, have said several times in interviews and in presentations to analysts that as a rule they are leery of any acquisition that would involve absorbing big businesses with an uncertain future.

Wamu, which has posted three straight quarterly losses, has estimated it could lose up to $19 billion on bad mortgages before the credit crisis ends. Some analysts have predicted the damage is likely to top $30 billion. Moody's Investors Service and Standard & Poor's lowered their ratings on Wamu's credit to junk status this week, citing capital concerns.

A Wamu spokesman did not respond to an interview request.

Analysts have said for several weeks that Wamu, if forced to sell, might get sold off in pieces, and that might appeal to Wells.

"I can see Wells being a part of the party there," said Christopher Mutascio at Stifel Nicolaus & Co. "I don't think they would look at Wamu in the whole, but if Wamu is to be sold, it may be sold in pieces. Wells might look at some of those pieces and see if it makes sense."

Analysts said there could well be a wide chasm between Wells' showing interest and actually making a bid on all or part of Wamu or another troubled company. But, Mr. Mutascio said: "There's a lot of opportunities out there all coming together at once, and you've got to weed through them and see what's best. Sometimes things fall on your plate."

But analysts said it is less likely Wells will follow the lead of B of A — which on Monday announced a deal to buy Merrill Lynch & Co. Inc. — by going after one of the two remaining large Wall Street investment banks, Morgan Stanley and Goldman Sachs Group Inc. But analysts said Thursday that Wells has shown scant interest in investment banking. "I would be awfully shocked if Wells was interested in either of the firms," Mr. Mutascio said. "The mantra at Wells is, 'We like to distribute product; we don't like to originate product.' They don't like the investment banking side of things."

Wells' deal for the $1.4 billion-asset Century Bancshares Inc. of Dallas, which was announced in August and is to close by yearend, would be its second bank acquisition this year and its fourth over the past two years. But the sellers in all of those deals were community banks in growth markets, not national companies beset by mortgage problems. "Our acquisition strategy hasn't changed," Wells corporate spokeswoman Julia Tunis Bernard said Thursday. "Beyond this we don't comment on rumors or speculation."

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