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Dime confirms merger talks
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June 22, 2001: 11:31 a.m. ET
Washington Mutual reportedly is suitor; price estimated at $5B
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NEW YORK (CNNfn) - Dime Bancorp Inc. confirmed Friday it is in discussions with an unnamed larger bank. A newspaper report identified the other bank as Washington Mutual, the nation's largest savings and loan, and pegged the purchase price at about $5 billion.
Dime (DME: down $0.99 to $37.09, Research, Estimates) stressed there is no assurance a definitive merger agreement will be clinched.
Talks between the two thrifts are at a delicate stage and could end any time, the Wall Street Journal said. Seattle-based Washington Mutual (WM: down $0.48 to $38.91, Research, Estimates) and Dime have discussed a merger in the past but never come to terms, the report said.
Precise details of the deal could not be determined, the paper reported. However, talks indicate a tax-free deal that wouldn't offer much of a premium to Dime's stock price, which has risen considerably in the past year, bringing the company's market worth to about $4.5 billion. Warrants and other options would bring the total to $5 billion.
Dime did not reveal any financial terms being discussed and said it would not make any further announcements regarding the transaction until either a definitive agreement has been executed or negotiations were terminated.
News of the negotiations failed to boost Dime shares, which fell more than 2 percent in mid-day trading, while Washington Mutual also shed nearly 2 percent.
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Dime was founded in 1859 to cater to customers who had no more than 10 cents to deposit at a time. The bank is parent of Dime Savings Bank, which has about 120 branches in the New York metro area and is one of the nation's largest thrifts.
Last year, Dime (DME: Research, Estimates) fought off a hostile $1.9 billion takeover bid by North Fork Bancorp, a local competitor.
Washington Mutual is seen as wanting to expand its already strong mortgage-lending business, and Dime's North American Mortgage Co. unit would seem to fulfill this goal. Washington Mutual operates in all 50 states, but most branches are concentrated on the West Coast, in Texas and in Florida. Dime's 120 New York-area branches would give it a foothold in the Northeast. 
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