Jan. 27 (Bloomberg) -- Blackstone Group LP, Carlyle Group and other private equity owners may gain as much as $1.2 billion on their investment in BankUnited Inc. when the Florida lender completes its initial public offering.
The IPO is likely to be priced above the forecast $23 to $25 a share range today, a person with knowledge of the process said yesterday. At $25, the offering would raise as much as $656 million, more than twice the amount BankUnited initially registered to sell last year. The current owners paid $10.01 a share on average, according to filings with the U.S. Securities and Exchange Commission.
The private equity investors, also including WL Ross & Co. and Centerbridge Capital Partners LLC, are selling partial stakes at a profit after taking over BankUnited for $900 million in 2009 when it was shut by federal regulators. BankUnited and Ally Financial Inc., the auto lender that’s interviewing banks for its own IPO according to two people familiar with the matter, are pursuing public offerings after the KBW Bank Index reached an eight-month high this month.
“Confidence in banks is coming back,” said Quinten Stevens, managing partner at Darien, Connecticut-based hedge fund Stevens Asset Management LLC.
Share Sale Profits
The buyout firms are trimming their stakes less than two years after buying BankUnited. At $25 each, New York-based Blackstone, Carlyle, WL Ross and Centerbridge would be selling a combined 19.37 million shares worth $484.3 million in the IPO. That would represent a profit of $290.4 million, based on the average $10.01 a share paid by existing owners, according to the SEC filing and data compiled by Bloomberg.
The firms’ paper gains on their remaining stakes in BankUnited would be almost $875.6 million, the data show.
BankUnited Chief Executive Officer John Kanas, hired by the buyout group to help take over the bank, may make a profit of as much as $14.8 million selling shares. He plans to maintain a stake of 5.6 percent after the IPO, according to the prospectus.
About 85 percent of the 26.3 million shares for sale are being offered by the existing stockholders, the filing said. BankUnited may have a market value of as much as $2.42 billion after the IPO, data compiled by Bloomberg show.
Melissa Gracey, a spokeswoman for Miami Lakes, Florida-based BankUnited, declined to comment. Tom Johnson, an outside spokesman for the private equity owners, declined to comment.
The buyout group was among a handful of investors that won regulatory approval to take over failed lenders with government support during the credit crisis. Investors including J.C. Flowers & Co. bought California’s IndyMac Bank in 2009 and pumped $1.55 billion into the lender.
The Standard & Poor’s 500 Index’s climb to a two-year high is spurring LBO firms to sell investments after the worst financial crisis since the Great Depression had frozen deals.
Nielsen Holdings NV, the New York-based television-audience rating company that was taken private by six leveraged buyout firms in 2006, rallied in its first day of trading yesterday after selling its IPO above the forecast price range. It was the biggest U.S. initial sale for a private equity-backed LBO target since November 2006, according to data compiled by Bloomberg and Greenwich, Connecticut-based Renaissance Capital LLC.
Ally, based in Detroit, is interviewing investment banks this week to manage its IPO as the firm works toward independence from U.S. government control, two people with knowledge of the matter said yesterday. The Treasury Department owns 73.8 percent of Ally, which used to be called GMAC Inc.
The 24-member KBW Bank Index has gained 23 percent since Aug. 30. On Jan. 14 it reached the highest level since May 13.
Private equity-led IPOs last year rose 4.1 percent on average in the first month of trading, less than half the 9.2 percent advance for all other IPOs, data compiled by Bloomberg show. A record $1.6 trillion in leveraged buyouts were completed from 2005 to 2007, according to London-based Preqin Ltd.
WL Ross of New York, Blackstone and Washington-based Carlyle each control about 20.6 million BankUnited shares through affiliated funds, or about 22 percent of the company, according to the filing. New York-based Centerbridge controls about 16.1 million shares, or about 17 percent. Ross, Blackstone and Carlyle plan to each sell 5.1 million shares, while Centerbridge plans to sell about 4 million shares, according to the filing.
At the midpoint offering price of $24, BankUnited would be valued at 1.75 times book value, or assets minus liabilities, as of Sept. 30, taking into account proceeds from the IPO, according to the filing. That’s more than double the average price-to-book ratio of 0.76 among 225 U.S.-traded savings and loan companies, data compiled by Bloomberg show.
BankUnited, formerly BankUnited Financial Corp., was founded in 1984 and publicly traded from 1985 until it was shuttered by regulators on May 21, 2009.
The lender surged in value when the Federal Deposit Insurance Corp. agreed to reimburse the bank for 80 percent of losses up to $4 billion and 95 percent of any costs above that amount. The FDIC estimated the failure would cost its insurance fund $4.9 billion.
The 4 million shares being sold directly by BankUnited may give the company proceeds of about $100 million to be used for general corporate purposes, according to the prospectus. The company will not receive any money from the stock being sold by the current owners.
BankUnited had planned to use proceeds to take over New York-based banks, a person with direct knowledge of the plans said in October when the company first filed for an IPO.