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Blackstone-Backed BankUnited Said to Be Near Deal to Buy Herald National

BankUnited Inc., the lender backed by Blackstone Group LP and Carlyle Group, is nearing an agreement to buy New York-based Herald National Bank (HNB), said a person with direct knowledge of the matter.

A deal may be announced as soon as this week, said the person, who spoke on the condition of anonymity because the discussions are private. Herald National had a market value of about $36 million as of May 27. Talks could still break down.

The takeover would help fulfill BankUnited’s ambition of entering the New York market, where Chief Executive Officer John Kanas spent most of his career. Kanas told investors when he took Miami Lakes, Florida-based BankUnited public in January that he was seeking a New York expansion. He ran Melville, New York-based North Fork Bancorporation for about 20 years before selling it to Capital One Financial Corp. (COF) in 2006.

BankUnited has about 80 branches, all of them in Florida. The lender said in regulatory filings last year that it would have a competitive advantage in New York because the company’s executives once “managed one of the most successful regional banks in the market.”

Herald National jumped 80 cents, or 27 percent, to $3.79 at 4:15 p.m. on the NYSE Amex. BankUnited rose 59 cents to $28.36.

Kanas and another executive are subject to non-compete agreements through August 2012 meant to keep them from being able to operate in New York, according to last year’s filings. The purchase of Herald National would be structured in a way that complies with those terms and may be made through a unit of BankUnited, the person said.

New York Branches

Spokeswomen for Herald National and BankUnited didn’t return calls seeking comment.

Adding Herald National would give BankUnited three New York branches, in Manhattan, Brooklyn and Melville. The commercial bank had $501 million of assets as of March 31, compared with $10.8 billion for BankUnited.

Herald National was founded in 2008 by investment firms and Daniel Healy, a former North Fork chief financial officer. The bank is currently run by Raymond Nielsen, who sold his Reliance Bancorp to North Fork in 2000 and was later on the North Fork board of directors.

Kanas and a group of private-equity investors including Carlyle and Blackstone bought BankUnited, a collapsed Florida lender, in 2009, pumping in $900 million of fresh capital and entering into a loss-sharing agreement with the Federal Deposit Insurance Corp.

To contact the reporters on this story: Zachary Mider in New York at zmider1@bloomberg.net; Cristina Alesci in New York at calesci2@bloomberg.net.

To contact the editor responsible for this story: Jennifer Sondag at jsondag@bloomberg.net

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