WaFd shareholders are about to own 41% of someone else's bank

If you own WaFd (WAFD) stock, you may have just received an email that reads like the start of a crime movie: an "Investor Alert" from a law firm with a former state attorney general's name attached, investigating the merger, the "adequacy of price and process," and whether the deal is "fair to WaFd shareholders". Scary. And, it turns out, almost entirely a formality. But the formality points at a real structural fact about this deal that is worth understanding, because it tells you what you are actually getting as a WaFd holder.

Here is the structure. On September 7, WaFd — the Seattle thrift — announced a $3.9 billion, all-stock combination with EverBank, the Jacksonville, Florida online bank. The press release calls it a "reverse merger," which is the odd part that makes the alert make sense. EverBank Financial merges into WaFd's holding company, so WaFd technically survives as the acquiring, publicly traded entity. Then the name, the CEO, and the majority of the stock all go to EverBank. The combined company will be renamed EverBank Financial Corp, trade under ticker EVBK, be run by EverBank's CEO Greg Seibly, and count seven EverBank-appointed directors against six WaFd ones on the board. WaFd's own CEO, Brent Beardall, steps down to president.

So the labels "acquirer" and "acquired" are doing very little work here. In a reverse merger the nominal buyer ends up the minority; the accounting acquirer is EverBank. That is the sort of classification boundary that determines everything downstream.

Now the number that actually matters: WaFd shareholders will hold about 40.8% of the combined company, and EverBank's investors will hold about 59.2%. That majority, and the control that comes with it, belongs to a private-equity consortium — funds managed by Stone Point Capital, Warburg Pincus, Reverence Capital Partners, Sixth Street, Bayview Asset Management, and TIAA — that bought TIAA's banking arm in 2023 and has since been weighing a sale, a merger, or an IPO.

There is your old-finance-in-a-new-wrapper moment. A private, private-equity-owned bank folded into a public bank's shell, with the private owners keeping control — a reverse merger functioning as a public listing without an IPO. If it looks like a bank is buying a bank, it is actually a private consortium using WaFd's public listing as its exit vehicle.

That is the genuinely interesting lens through which the law-firm investigation reads. The KSF-type alert is the standard opening move of the M&A plaintiffs' bar: a firm blasts out an "investigation" of an announced merger, invites shareholders to call, and waits to see if it can recruit someone to file a "merger objection" suit — which, in most cases, settles for extra disclosures in the proxy and no added money. It is a routine, near-automatic cost of doing a deal. But it does zero in on the one question this deal leaves open: is 40.8% fair?

The deal's own math is marshaled to argue yes. Management says the combination should be strongly accretive to WaFd shareholders — roughly 29% EPS accretion projected for 2027 — and that the combined $75 billion-asset bank should earn a return on tangible common equity of about 15% after cost synergies, versus roughly 11% for WaFd on its own. That is the standard marriage-of-equals trade: you tolerate tangible book value dilution (earned back in under two years, per the banks) because the bigger, more profitable entity produces better per-share earnings. The reasoning behind 40.8% is that WaFd's standalone value is some share of the combined value, and the EPS accretion is supposed to show WaFd holders coming out ahead.

But notice what unreported premise hides inside that framing. The 29% accretion is a forecast built on synergy assumptions, integration costs, and a big lending-backbook reshuffle. And it is arrived at in a context where WaFd's management has given up the top job, the bank's name, its ticker, and majority control — to a consortium that gets a majority while contributing its own EPS and its own synergies. Whether 40.8% is "fair" cannot be read off the accretion number, because that number is partly the point the negotiators were arguing over.

The market is not buying the "accretive" story with wild enthusiasm. WaFd's stock has been trading around $34, below the roughly $36.30 price the deal was valued against, and the stock was down about 5% over the five days into the announcement. For an all-stock deal with no cash premium, that is the market's way of saying: we see the dilution and the loss of control, and we are not paying up for the promised accretion until it shows up in real earnings.

So what should a WaFd holder actually watch? Not the law-firm alert, which is theater. Watch the proxy statement when it arrives — the fairness opinion, the analysis that produced the 40.8% split, and the assumptions baked into that 29% accretion number. That document is where the "adequacy of price and process" either gets explained or gets exposed. And watch the shareholder vote, which is a real gate: this deal needs WaFd shareholder approval, plus regulators, with closing expected early in 2027.

The alert in your inbox is a fishing trip dressed as a warning. The stranger claim behind it — that a public bank's shareholders are being handed a 41% minority stake in a company controlled by a private-equity consortium that is using their stock as its exit — is not theater at all. That is the deal. And whether 40.8% was the right number for giving that up is the only question in the whole transaction worth answering carefully.