Aug. 20 (Bloomberg) -- Banco Bilbao Vizcaya Argentaria SA won the bidding to take over ailing Texas lender Guaranty Financial Group Inc., people familiar with the matter said, in what will be the Spanish bank’s sixth U.S. purchase since 2004.

The acquisition, arranged by the Federal Deposit Insurance Corp., follows the $1.9 billion purchase by Spain’s Banco Santander SA of Philadelphia-based Sovereign Bancorp Inc. in January. BB&T Inc. last week acquired Alabama’s Colonial BancGroup Inc. in a deal also brokered by the FDIC.

The purchase shows “those companies didn’t make serious acquisition errors years ago,” Gary Townsend, president of Hill-Townsend Capital LLC in Chevy Chase, Maryland, and a former bank analyst, said yesterday. “As in the case of BB&T buying Colonial BancGroup, it gives BBVA the opportunity to expand on the cheap.”

The acquisition helps Bilbao, Spain-based BBVA to take another step toward diversifying its business as it battles recession in Spain and Mexico, which account for at least two thirds of profit. The company, Spain’s second-largest bank by market value, acquired Birmingham-based Compass Bancshares Inc. in 2007 for $9 billion as part a strategy to expand in the U.S. “Sunbelt.”

BBVA gained 19.5 cents to 11.53 euros at 10:12 a.m. in Madrid trading. The shares have gained 33 percent this year, valuing BBVA at 43.3 billion euros ($61.8 billion).

‘Open For Business’

Guaranty said last month that it was unable to raise capital as demanded by regulators and will probably fail. The Office of Thrift Supervision has taken over board functions, directed the Austin, Texas-based bank to turn itself over to the Federal Deposit Insurance Corp. and is pursuing transactions likely to wipe out shareholders, Guaranty said in a July 23 filing with the Securities and Exchange Commission.

Bids for the bank, which had about $16 billion in assets and $9 billion in deposits, were due Aug. 18, the people said.

If regulators were to seize Guaranty, it would be the ninth biggest lender to fail in U.S. history, based on its assets and data compiled by the FDIC.

Guaranty remains “open for business. We continue to work with our regulators,” John Wessman, a spokesman, said in an e- mailed statement. The bank provides the same FDIC deposit insurance coverage as other member banks, he said.

BBVA spokesman Ed Bilek and FDIC spokesman Andrew Gray declined to comment. A spokeswoman for BBVA in Spain, who asked not to be identified in line with company policy, said the bank had no comment.

Blackstone, Flexpoint

Blackstone Group LP, Gerald Ford’s Flexpoint, U.S. Bancorp and Carlyle Group were among groups considering bids for Guaranty’s assets, people familiar with the situation said earlier. Guaranty’s biggest shareholders are billionaire Carl Icahn and Omni Hotels owner Robert Rowling, who together control a third of the bank’s shares, according to data compiled by Bloomberg.

Spokesmen for Blackstone and Carlyle declined to comment.

Guaranty was spun off in December 2007 by Temple-Inland Inc., a paper packaging maker, and began trading that month at $17.50. Icahn had pushed for the spinoff, saying Temple-Inland could unlock value through a spinoff.

The lender hasn’t disclosed results since the third quarter of last year, when it reported a $162 million loss on delinquent homebuilder loans and declines in mortgage-backed securities.

U.S. Branch Network

BBVA ranks as the third-largest bank by assets in Alabama and fourth in Texas and has 583 U.S. branches, according to the company’s Web site. Jose Ignacio Goirigolzarri, the bank’s president and chief operating officer, said July 28 that BBVA would look at opportunities arising from the reorganization of the U.S. banking industry, adding they wouldn’t be “very significant” in terms of their impact on the bank’s capital.

Francisco Gonzalez, BBVA chairman and chief executive officer, discussed his interest in acquiring failed U.S. banks during visits this year with FDIC Chairman Sheila Bair, the Treasury Department and Federal Reserve, the Wall Street Journal reported Aug. 18.

Guaranty gained 5 cents to 39 cents a share at 4:15 p.m. in New York Stock Exchange composite trading. The stock has lost 90 percent of its value in the past year.

To contact the reporter on this story: David Mildenberg in Charlotte at dmildenberg@bloomberg.netJonathan Keehner in New York at jkeehner@bloomberg.net.

Last Updated: August 20, 2009 05:23 EDT