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PacWest Bancorp (PACW) will buy American Perspective for $58 million in cash, trumping a $44 million offer that Umpqua Holdings (UMPQ) made for the San Luis Obispo, Calif., company just a month earlier.
April 30 -
Pacific Capital's calculus was simple: Texas financier Gerald Ford, majority owner of the California bank, decided its shares would never trade as high as the price UnionBanCal was willing to pay.
April 12 -
The regional bank is expanding into the Golden State's central coast region with its first open-bank deal in five years.
April 10
It might be a buyer's market, but that hasn't stopped some banks from knocking on doors where there is no for-sale sign.
American Perspective Bank in San Luis Obispo, Calif., found that out firsthand. The bank said late Monday that it would sell itself to PacWest Bancorp of Los Angeles,
Umpqua in Portland, Ore., which had its offer bested by 30%, will settle for a $1.6 million termination fee from American Perpective.
Deal makers say friendly, but unsolicited offers, are an emerging trend as buyers attempt a targeted approach to find acquisition candidates. Buyers are tired of sifting through struggling banks that are anxiously looking to sell, preferring instead to approach healthy banks.
Banking lawyers say their clients are receiving more cold calls, and investment bankers say their clients are
"The conversations in M&A have accelerated recently, and in many cases it is the buyer that is initiating those conversations," says Stephen Klein, a lawyer at Graham & Dunn in Seattle. "There is a desire from the buyers to deploy their strong capital. It is increasing, but I don't think there is a feeling of desperation yet."
Earlier this year and 100 miles down the coast, Pacific Capital Bancorp in Santa Barbara, Calif., agreed to sell after
In a March interview, Carl Webb, Pacific Capital's president and chief executive, said the deal was too good to pass up. Webb is also the senior principal of Ford Financial Fund, which recapitalized Pacific Capital in 2010.
"We figured it would be plus or minus a five-year investment, but it turned out to be much shorter," Webb said. "We felt the economics were compelling enough that we couldn't ignore it."
Wesley A. Brown, a managing director at St. Charles Capital in Denver, says more of his buy-side clients are asking him to identify possible sellers. He says roughly a quarter of the targets he contacts are open to discussions. The rest are uninterested or are waiting for pricing to improve.
The hawkish tactic, Brown says, is driven by three things: asset quality has largely improved after several regulatory exams; prices are perceived to be low, so bankers are more willing to be aggressive on their pursuits; and there is a shortage of high-quality sellers actively looking for buyers.
"We are at the back end of the cycle and buyers feel like they need to try to make something happen," Brown says.
PacWest's unsolicited offer is different than cold-calling possible sellers, but Brown says more deals could be unseated by unsolicited offers, too.
"It is a daring move," Brown says. "But look at what they know. They know it is agreeable to a sale and maybe this is their last chance to get a target they've watched for a while."
Brown adds that having a pending deal could even be a seal of approval since someone had already agreed to buy the bank.
"They already know that it has passed Umpqua's due diligence test," he says.