BankUnited Inc's (BKU.N) private equity owners abruptly pulled the lender off the market on Wednesday after a brief sale process drew offers below expectations, and will instead focus on expanding in Florida and New York.
The bank -- which has Wilbur Ross's WL Ross & Co, Blackstone Group LP (BX.N) and Carlyle Group CYL.UL among its owners -- wanted an offer in the high $30-per-share range, a source familiar with the situation said. It has a market value of about $2.5 billion.
The bank's shares closed on Wednesday at $25.95 on the New York Stock Exchange, and fell 11 percent in aftermarket trading.
BB&T Corp (BBT.N) and Toronto-Dominion Bank (TD.TO) put in initial bids, sources said. Goldman Sachs Group Inc (GS.N) was advising BankUnited.
"The board wanted to see what the company was worth. It had in mind a very, very generous price," the source said. "The board felt so optimistic because the prospects for next year are great and earnings for the quarter are great, so it emboldened them to think about a very high price."
BankUnited and BB&T declined to comment on the details of bids. TD was not immediately available for comment.
BankUnited said it plans to report fourth-quarter results on January 25, where it plans to report growth in deposits as well as loans.
BankUnited has more than $11 billion in assets and some 95 branches and focuses on commercial banking. In June, BankUnited agreed to buy New York-based Herald NationalBank.
BankUnited has already proven to be a blockbuster deal for the private equity firms. When the company went public in January 2011, the private equity investors saw the value of their initial investment of $900 million nearly triple at the IPO price of $27 per share.
The consortium of private equity investors, led by veteran banker John Kanas, bought the assets of a failed Florida bank of the same name during the financial crisis in May 2009. Kanas had earlier run North Fork Bancorp for about 20 years before eventually selling it to Capital One (COF.N).
The deal, which came with certain protections offered by the Federal Deposit Insurance Corp, led to a rush of other private equity and hedge fund investors looking at investing in the sector and prompted regulators to put in stricter rules to govern such investments.
(Reporting by Paritosh Bansal in New York and Brenton Cordeiro in Bangalore; Editing by Supriya Kurane and Gunna Dickson)