Thursday, May 14, 2009

BankUnited Bidders Want Shareholders Wiped Out

Bloomberg reported bidders for distressed BankUnited asked the FDIC to put the bank in receivership. This wipes out shareholder equity, enabling buyers to pay less for the institution. Four private equity underwriters joined in one bid. They include Carlyle Group, Blackstone Group LP, Centerbridge Capital Partners LLC and WL Ross & Co.

Carlyle works to cram down debt holders of many affiliates. Might it demand shareholders be wiped out before any BankUnited deal? Watch closely investors. Shadow bankers are working their way into the commercial banking realm. They need someone to lend them money. What better than a captive bank?