Reuters: Regulatory News: UPDATE 1-PacWest Bancorp to buy CapitalSource for $2.29 bln

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UPDATE 1-PacWest Bancorp to buy CapitalSource for $2.29 bln Jul 22nd 2013, 22:47 Mon Jul 22, 2013 6:47pm EDT * Cash and stock deal values CapitalSource at $11.68 per share * Deal represents a 19 percent premium to CapitalSource's Monday close * CapitalSource shares up 12 percent after-market July 22 (Reuters) - Bank holding company PacWest Bancorp said it will buy commercial bank CapitalSource Inc for about $2.29 billion in cash and stock to expand its presence in southern California. This would be PacWest's second acquisition in eight months and the largest regional bank merger since M&T Bank Corp agreed to buy Hudson City Bancorp Inc for $3.7 billion in August 2012. PacWest bought First California Financial for about $231 million in an all-stock deal in November. Though analysts have been arguing that U.S. banks are ripe for consolidation as low interest rates persist after the 2008 financial crisis, the pace of consolidation has been disappointing, in part due to heightened regulatory scrutiny. M&T Bank and Hudson City said in April that the deal would be delayed because of U.S. regulatory concerns over anti-money-laundering procedures. CapitalSource shareholders will receive $2.47 in cash and 0.2837 shares of PacWest common stock for each share held, PacWest said in a statement on Monday. Based on the Monday closing price of both stocks, the deal values CapitalSource at $11.68 per share, representing a premium of 19 percent to the stock's close. CapitalSource shares rose 12 percent in trading after the bell. PacWest Chief Executive Matt Wagner will lead the combined company and CapitalSource's national lending operation will continue as a division of Pacific Western Bank, PacWest's banking subsidiary. Independent directors of both banks have approved the deal, which is expected to close in the first quarter of 2014, PacWest said. JP Morgan Securities LLC advised CapitalSource, while Jefferies LLC was the lead financial adviser to PacWest Bancorp. Shares of PacWest were up marginally in trading after the bell. CapitalSource shares, which closed at $9.83 on Monday, were at $11.05 in post-market trading. Link this Share this Digg this Email Reprints

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