BankUnited Rises as Auction Nears Close
Shares of BankUnited (BKUNA) swung wildly early Tuesday, as investors waited to learn the results of an auction to take over the struggling bank.
The Coral Gables, Fla.-based bank's stock fluctuated from a dip of 5% to a rise of 10% in a matter of 15 minutes. Recently, it was up 1.3% at 90 cents.
The Federal Deposit Insurance Corp. warned BankUnited that it may be forced into receivership if it is unable to raise up to $1 billion in fresh capital to cover escalating losses or find an acquirer, according to a regulatory filing earlier this month. The bank has not filed earnings statements for the past two quarters, but said it expects a second-quarter loss of $443 million, up from $66 million a year earlier.
The deadline for a solution was extended from Friday to Tuesday. Several players in the private-equity and banking space are reported to be involved in the FDIC's auction.W.L. Ross & Co., the private-equity firm of billionaire distressed investor Wilbur Ross, has been vocal about its bidding. W.L. Ross teamed up with competitors Carlyle Group, Blackstone Group and Centerbridge Partners, and is being advised by former North Fork CEO John Kanas, to negotiate a deal. Toronto-Dominion Bank (TD) and Goldman Sachs (GS) have also teamed up to throw their hats in the ring, according to several news reports citing anonymous sources. J.C. Flowers & Co., the firm run by billionaire private-equity veteran J. Christopher Flowers, was also rumored to be interested in participating in a BankUnited deal. Under current law, each individual private-equity firm must own less than 25% of a bank, or 33% in certain cases, causing several groups to partner up on deals. Flowers did this with the acquisition of the failed California bank IndyMac Bancorp last year.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV