Two Bidders Left for IndyMac

The Federal Deposit Insurance Corp. has trimmed the final list of IndyMac bidders down to two private equity consortiums: Dune Capital Management and one other, according to investment banking sources. The identity of the other consortium could not be ascertained at press time. "The deal still isn't done," said the source. "We could hear today or any time over the next few days." The FDIC declined to comment. One source, requesting anonymity, said Apollo Management is out of the running as a bidder. The agency prefers to sell IndyMac FSB of Pasadena, Calif. in a whole bank transaction instead of the government retaining some of its troubled assets. The agency, noted one investment banker, is very focused on getting private equity investors to put as much money as possible at the bank holding company level in the event more cash is needed at an institution. "The problem with private equity investors is that they want as much control as possible but they want limited liability in case something goes wrong," said the investment banker. The FDIC had hoped to complete the deal by year-end but has not. Complicating the sale of IndyMac's $180 billion residential servicing portfolio is large buyback requests forced upon the failed thrift by Fannie Mae. Fannie said it is waiting on "information from the FDIC with regard to servicing valuations and confirmation of the identity and eligibility of the proposed buyers in order to finalize an agreement." Fannie, which is operating under a federal conservatorship itself, added that it "will continue to work constructively with the FDIC and IndyMac Federal Bank to reach a resolution in the near term that is in the best interest of all parties involved." IndyMac was taken over the government last summer and has operated under a conservatorship ever since.