NEW YORK — Doral Financial Corp. said in a securities filing Tuesday that its rejected offer for First BanCorp of Puerto Rico was the "most viable alternative" to First BanCorp's own efforts to raise capital.
On Monday First BanCorp said it had received and rejected from Doral an offer of 30 cents a share in an all-stock deal. First BanCorp said the offer wasn't in the best interest of the company and its shareholders.
The filing by Doral on Tuesday was only about the offer First BanCorp had rejected. It didn't include Doral's response to First BanCorp's rejection.
In its filing, quoting a Dec. 2 letter, Doral said it had been following "with great interest" First BanCorp's attempts to raise capital.
"We believe that our proposal presents the most viable alternative for First BanCorp and its shareholders," the letter read. "We believe we can combine our companies on a basis that would be financially attractive to both sets of shareholders and would not require external assistance."
First BanCorp has been trying to raise capital since the spring, when it originally planned to buy one of its collapsing competitors in a government-assisted auction that remapped the Puerto Rican banking world. But it didn't raise capital in time and investors have fretted over bad construction loans.
Last week, the Treasury Department said it would convert its preferred stock in the bank into common stock if First BanCorp raised only $350 million instead of the $500 million it originally sought to raise. Moreover, Treasury will give First BanCorp more advantageous conversion terms on its preferred stock.
Doral made the offer to enter into merger discussions the same day First BanCorp announced the renegotiated terms.
The letter said the combined bank would be the second-largest bank in Puerto Rico by deposits, and "extremely beneficial for the health of the larger Puerto Rican banking market."
The Doral presentation said the combined banks would have 20% of Puerto Rico's deposits and 35% of its loans in dollars, both numbers second only to Popular Inc.
It concluded to say that Doral has hired Credit Suisse Group AG and FBR Capital Markets Corp. as financial advisers.
Doral also attempted to buy another Puerto Rican bank earlier this year but was left out, and then turned its sights on First BanCorp.
First BanCorp shares closed at 30 cents for the second straight day Tuesday, after jumping to the offer price earlier Monday.
