UPDATE 3-Wilbur Ross buying 25 pct stake in Sun Bancorp
* Bank gets $100 mln cash injection
* Ross buys shares at $4
* Sun Bancorp shares jump as much as 47 pct (Adds share movement, details on capital measurements)
NEW YORK, July 8 (Reuters) - Billionaire investor Wilbur Ross is taking a 25 percent stake in Sun Bancorp (SNBC.O), the New Jersey bank said on Thursday, sending its shares up as much as 47 percent.
Ross, who in April invested millions in British entrepreneur Richard Branson's Virgin Money, has said he expects thousands of U.S. banks to fail as a result of the financial crisis. He has acquired stakes in banks in Florida and Michigan.
Ross's private equity firm, WL Ross & Co, and other investors agreed to invest $100 million in common stock as well as preferred shares that, with shareholder approval, will convert into common, Sun Bancorp said.
The other investors include the bank's largest shareholder, the Brown family.
The shares bought by WL Ross will represent 24.9 percent of holding company Sun Bancorp's outstanding shares on conversion. The investment was made at $4 a share.
Shares of Vineland, New Jersey-based Sun Bancorp, which has $3.5 billion in assets and 70 branches in the state, closed on Wednesday at $3.61, down 3.7 percent year to date.
The announcement sent the stock up as high as $5.30 on Thursday.
Ross will join the boards of Sun Bancorp and Sun National, the bank said.
In an interview with the New York Times on Wednesday, Ross said Sun National Bank -- Sun Bancorp's main subsidiary -- could be the first of many banks he acquires in New Jersey.
Sun National said it would use the capital to "strengthen and expand current operations as well as to pursue growth opportunities throughout the state of New Jersey."
Analysts at Janney Capital Markets raised their rating on Sun Bancorp to "buy" from "neutral" after the announcement, noting the transaction should boost earnings per share slightly.
"We regard the investment by WL Ross as a stamp of approval for Chief Executive Officer Thomas X. Geisel," analysts Rick Weiss and David Peppard wrote in the report.
The cash injection would also raise Sun Bancorp's Tier 1 risk-weighted capital -- a common measure of capital strength -- to 13 percent or above. The bank said that level was above the 9.5 percent required by the Office of the Comptroller of the Currency under an April agreement. (Reporting by Elinor Comlay; editing by John Wallace and Lisa Von Ahn)
- Ten countries scour sea for Malaysia jet lost in 'unprecedented mystery' |
- Shots fired in air during raid at Crimea naval base |
- Missing Malaysian jet may have disintegrated in mid-air: source |
- Mexico kills drug kingpin reported dead years ago: official
- Pistorius vomits in court at Steenkamp autopsy details |