BankUnited IPO raises more than expected-underwriter

NEW YORK (Reuters) - BankUnited (BKU.N), a bank bought by private equity firms during the financial crisis, raised $783 million in an initial public offering that priced higher and sold more shares than expected, an underwriter said on Thursday.

Florida-based BankUnited sold 29 million shares for $27 each, the underwriter said, confirming an earlier Reuters report that the IPO was likely to price $1 to $2 above the range. BankUnited had filed with U.S. regulators to sell 26.25 million shares at $23 to $25 each.

BankUnited's IPO is the first for a major failed institution taken over by private investors during the financial crisis. The IPO represents a return of almost three times the original investment by the private investors.

That investment could be worth more when the stock starts trading on the New York Stock Exchange on Friday under the symbol "BKU."

Over the past decade, financial services IPOs have risen an average of 13.64 percent on the first day of trade, compared with 10.88 percent for the IPOs of all companies debuting in the United States, according to Ipreo, which provides capital markets data and analytic services.

After three months of trading, however, financial services IPO returns have historically matched the average 15 percent returns of all IPOs, according to Ipreo.

The best-performing financial services IPO was Fortress Investment Group's (FIG.N) 2007 share float. Its shares rose nearly 68 percent on their first day of trade, according to the data.

PRIVATE EQUITY PAYDAY

BankUnited was bought by private equity firms including Wilbur Ross's WL Ross & Co, Blackstone Group (BX.N) and Carlyle Group CYL.UL in 2009 in a deal worth about $900 million. The private equity firms struck a deal with the Federal Deposit Insurance Corp to limit losses.

Former North Fork Bank head John Kanas, who invested $23.5 million of his own money in the deal, became the bank's chief executive. Kanas now appears poised to recoup his investment through the IPO and still control a stake worth several times his initial investment.

Most of the shares in the IPO are being sold by the private investors. All of the major investors are selling a portion of their shares, and the private equity owners could more than double their investment.

The FDIC estimates it lost $5.7 billion on BankUnited but saved $1.5 billion by avoiding the bank's liquidation.

BankUnited has more than 75 branches, primarily in Florida, and also plans eventually to open branches in New York. As of September 30, the bank had $11.2 billion in total assets and $9.9 billion in total liabilities.

Underwriters on the offering were led by Morgan Stanley, Bank of America Merrill Lynch, Deutsche Bank Securities and Goldman Sachs & Co.

(Additional reporting by Alina Selyukh; Editing by Steve Orlofsky, Gary Hill)