Banc of California is in advanced talks to buy PacWest Bancorp and a transaction could be announced as soon as Tuesday, the Wall Street Journal reported, citing people familiar with the matter.
(Bloomberg) — Banc of California is in advanced talks to buy PacWest Bancorp and a transaction could be announced as soon as Tuesday, the Wall Street Journal reported, citing people familiar with the matter.
Centerbridge Partners and Warburg Pincus plan to contribute equity to help fund the deal, according to the report, which said the private equity firms will provide the only external source of funding for the acquisition.
Shares of Banc of California surged 20% to $15.73 at 3:12 p.m. in New York, the biggest intraday gain since 2020. PacWest slumped 25%.
Representatives of the two banks didn’t immediately respond to requests for comment. A representative for Warburg Pincus declined to comment.
PacWest, a Beverly Hills-based regional bank, has been selling assets to improve liquidity after runs on deposits struck several regional lenders earlier this year, leading to the collapse of three California-based banks and one in New York. It has sold an asset-backed loan portfolio to Ares Management Corp., a separate pile of real estate loans to Kennedy Wilson Holdings Inc., and tapped an Apollo Global Management unit for a financing facility.
Banc of California had $10 billion of assets at the end of March, making it less than a quarter of the size of PacWest. But it saw relatively small deposit outflows in the first quarter and its 17% stock drop this year through Monday was mild compared PacWest’s 54% plunge.
–With assistance from Katherine Doherty.
(Updates with share reaction in third paragraph.)
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