Toronto-Dominion Bank chief executive officer Ed Clark is getting a second chance to acquire Florida’s BankUnited Inc. , but it will cost him a lot more this time around than it would have the first time.
BankUnited, which has a market capitalization of nearly $2.5-billion, is back up for sale. Bloomberg is reporting that TD, BB&T, and likely PNC Financial Services, are among the bidders and that BankUnited is hoping to strike a deal within about two weeks.
Mr. Clark made a play for BankUnited in the spring of 2009, after the lender, which had 80 branches, failed to meet a regulatory deadline to raise about $1-billion in capital and was ordered by the Office of Thrift Supervision to find a buyer.
TD submitted two bids to U.S. regulators in May of 2009, but, according to documents from the Federal Deposit Insurance Corp., its highest bid for BankUnited assets came in $980.9-million lower than the winning one from a private equity consortium led by billionaire investor and turnaround expert Wilbur Ross. Those were the early days of U.S. government-assisted deals, and when BankUnited went public a year ago the private equity investors who had scooped it up (the consortium also included Blackstone and Carlyle) made billions of dollars on what had been a relatively small investment.
Mr. Clark later expressed some regret about the low bid, and used it as a learning experience. “We finally got one,” Mr. Clark told the Globe in 2010, when he succeeded in picking up 69 Florida branches by way of a government-assisted deal. “This is an example of learning by doing.”
That successful deal sped up TD’s growth strategy in Florida by five years, diminishing the need for further Florida acquisitions. And, given that BankUnited is a less motivated seller this time around, its appeal might also have diminished.
But that won’t stop Mr. Clark from taking a look.
The question is how much he'll be willing to pay this time around.