Replies to post #542 on BankUnited Financial Corporation (fka BKUNQ)

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BankUnited Soars on Speculation of Bid Led by Kanas (Update1)
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By Jason Kelly and Jonathan Keehner

May 12 (Bloomberg) -- BankUnited Financial Corp., the home lender ordered by regulators to find a buyer, more than doubled in New York trading on speculation that John Kanas, North Fork Bancorp’s former chief executive officer, will mount a takeover.

BankUnited jumped 88 cents to $1.60 in 5:19 p.m. Nasdaq Stock Market trading, and sold for as much as $1.74 today. Kanas is leading a bid by Carlyle Group, Blackstone Group LP and WL Ross & Co., people familiar with the plan said yesterday.

Federal regulators earlier this year declared BankUnited “critically undercapitalized” and ordered the Coral Gables, Florida-based lender to find a buyer. They set a May 14 deadline for final bids. Private-equity firms have assembled teams and funds to buy banks at discounts after more than $1.4 trillion in losses triggered by the global credit crisis.

“While we believe that BKUNA’s branch network has value, we think that government support may be necessary to complete a deal,” Standard & Poor’s told clients today, referring to the bank by its stock ticker. S&P raised its price target by $1 a share to $1.50 while advising against new purchases.

Kanas, 62, an adviser to billionaire Wilbur Ross, would run the lender, Florida’s largest, said three people who asked not to be identified because the information is private. The group includes Centerbridge Capital Partners LLC.

BankUnited is the biggest banking institution based in Florida, with 85 branches and assets of $14.2 billion, according to a Feb. 13 statement. The stock has dropped 57 percent in the past year, leaving its market value at about $57 million.

Option-ARM Mortgages

The lender ranked among the biggest vendors of option- adjustable rate mortgages that allowed borrowers to skip part of their monthly payments and add the sum to their principal. The tactic backfired when home prices tumbled, leaving borrowers with mortgages that were more than their homes were worth.

Goldman Sachs Group Inc., the most profitable securities firm before converting to a bank last year, and Toronto-Dominion Bank, Canada’s second-largest lender by assets, are weighing a competing offer, the people said. J.C. Flowers & Co., the New York private-equity company run by J. Christopher Flowers, also is interested, according to a person familiar with the matter.

Representatives of New York-based Goldman Sachs and Toronto-Dominion of Toronto, Kanas and the private-equity companies in the group declined to comment yesterday and Flowers didn’t return a call seeking comment.

At least some of the private-equity firms are considering buying BankUnited assets if it is seized by regulators, according to people familiar with the process.

North Fork

After the end of the regular trading session, BankUnited said its loss in the period ended March 31 widened more than sixfold from surging defaults on option adjustable-rate mortgages. The fiscal second-quarter loss probably widened to $443.1 million, or $12.55 a share, from a loss of $65.8 million, or $1.88, a year earlier, according to a federal filing.

Kanas sold Melville, New York-based North Fork to Capital One Financial Corp. in December 2006 for $13.2 billion, then joined WL Ross last year to help spot and manage investments in distressed financial-services companies.

Kanas built North Fork into the New York area’s third- biggest bank by deposits with new branches and 14 acquisitions, including mortgage lender GreenPoint Financial Corp. in 2004.

To contact the reporters on this story: Jason Kelly in New York at [e-mail]; Jonathan Keehner in New York at [e-mail].
Last Updated: May 12, 2009 18:52 EDT