In what could be the most watched private equity deal of the year, a consortium of buyout firms led by billionaire investor Wilbur L. Ross has set its sights on BankUnited Financial Corp. (NASDAQ: BKUNA), says the Wall Street Journal (subscription required). The consortium includes Carlyle Group and Blackstone Group (NYSE: BX).
Earlier this year, federal regulators declared that the Florida-based lender was "critically undercapitalized" and demanded that it find a buyer or raise new capital. While regulators have traditionally favored other lenders in sales of banks, if Ross's group is successful, it would not only be one of the largest acquisitions in the financial-services sector made by private equity, but could also signal a shift in the government's attitude toward private-equity buyers of banks.
"Everyone is watching this deal," said a private-equity industry watcher in the Journal article. "This could be a template that will open the floodgates in terms of transactions."
Ross has reportedly long wanted to buy into the financial-services sector, but this deal is by no means a sure thing. Besides the government's reluctance to open the door to private equity, Canada's Toronto-Dominion Bank (NYSE: TD) and Goldman Sachs Group (NYSE: GS) are also said to be interested.
"If Wilbur gets this deal," said someone familiar with the offer, "it will signal to everyone that it's time to go back into banks." It could draw some of the estimated $450 billion of private-equity money off the sidelines and into banks.
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Reader Comments (Page 1 of 1)
5-18-2009 @ 5:16PM
clikdawg said...
And it'll be back to the Gilded Age before you can say Jack Sprat.
Would've been nice, Mr. Thoelke, to perhaps have mentioned in your little piece just exactly WHY the US Government has for many, many decades been reluctant "to open the door to private equity".
Those interested in a somewhat(!) meatier analysis would do well to read Eric Lipton's fascinating May 5th article at:
www.nytimes.com/2009/05/06/business/06equity.html
One by one we are abandoning (under the guise of "reform") the safeguards wisely put in place during the great (and real) Reform Movements of the early 20th century. Geithner is being hot-boxed on this issue by those eager to take advantage of the present capital shortage to further deregulate an industry which is sinking Main Street due to a paucity of effective regulation; you tell me how likely he'll be to resist.
Any benefits accrued will be to the would-be J.P. Morgans of this world, at the expense of the rest of us.
Last warning I'll post that the monopolists (with their dizzying array of holding companies and triple-blind ownership schemes) are hard at work targeting the financial sector -- one does so hate to become tiresome ...