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Report: Private equity firm wins bidding for IndyMac

December 26, 2008 |  1:27 pm

A private equity firm led by former Goldman, Sachs & Co. executives is the likely buyer of IndyMac Bank, according to a report today on the Mortgage Lender Implode-O-Meter website:

The winner is New York-based Dune Capital Management, founded by two ex-Goldman partners. Dune’s Co-CEO Dan Neidich was known as the "dean" at Goldman of investing the firm's capital in real estate. Chairman and Co-CEO Steve Mnuchin comes from a family of Goldman bankers. The firm was seeded in 2004 by legendary hedge fund trader George Soros.

But the report, which is sourced to an IndyMac insider in Pasadena, also says negotiations were continuing and that "the deal still is fluid." It didn’t put a price tag on the transaction.

Dune would buy the entire bank, including the 33 branches, the reverse-mortgage unit and the $176-billion loan-servicing portfolio, the report says:

According to sources inside of Indy, part of the concession on the deal by the Federal Deposit Insurance Corp. involves their loan-modification program -- protecting it is an important political agenda for their leader Sheila Bair. The FDIC will eat the forgone interest and only sell the marked-down principal amount of the loan to the buyer.

Getting the bank as a whole is a sticking point for Dune and as a result the Indy insider said they’ve been crunching numbers this week to try to get Dune to pay more for the reverse mortgage arm. The FDIC doesn’t want egg on its face if the bid is too low, leaving room for the private equity firm to profit from the flip of an asset sale after the deal is done.

The report also says that Dune’s financing for the deal would be provided by a consortium of private equity firms led by Los Angeles-based giant Oaktree Capital Management.

Oaktree, a well-known investor in distressed assets, had been among the firms that looked over IndyMac’s books in spring, when the bank was desperately seeking a cash infusion. IndyMac was seized by the government in July.

The FDIC has previously said it expected to announce a deal for IndyMac by New Year’s Eve. For more on what's left of the bank, see this post from Tuesday.

-- Tom Petruno

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