First BanCorp. of San Juan, Puerto Rico, has agreed to sell a 10% stake to Scotiabank of Toronto.
The deal was announced Friday, after two weeks of rumors that Scotiabank might buy First BanCorp outright.
The $325 billion-asset Scotiabank agreed to pay $94.8 million for 9.25 million shares of First BanCorp.
First BanCorp.'s stock rose as much as 10.4% in morning trading Friday and closed up more than 6%. A First BanCorp spokesman said the Scotiabank deal would close within 90 days.
Joe Gladue, an analyst with Cohen & Co. Inc., wrote in a research note issued Friday that the agreement "does not lock either party into any further deals," though Scotiabank would get right of first refusal and exclusive negotiating rights for certain periods.
First BanCorp said Thursday that it had corrected a two-year-old accounting error in which it wrongly booked mortgage-related transactions with R&G Financial Corp. of San Juan. It said it would work on filing the quarterly reports that it has missed since the first quarter of 2005 as well as on its full-year 2006 report, though it did say when it expected to complete them.
