© Reuters. Banc of California in advanced talks to acquire PacWest Bancorp, shares react
Banc of California (NYSE:) is currently engaged in advanced negotiations to acquire Pacwest Bancorp (NASDAQ:), as lenders seek to strengthen their positions in the aftermath of a regional-banking crisis earlier this year. According to a report from the Wall Street Journal, which cited people familiar with the matter, an official announcement regarding the deal could be made today, coinciding with the scheduled release of financial results for both banks, assuming there are no unexpected obstacles.
Following the news, shares of Banc of California jumped more than 22%, while shares of PacWest dropped around 28% intra-day today.
Despite the challenges surrounding the regional-banking system, both banks have weathered the recent turmoil relatively well, and their stocks have shown some signs of recovery. To strengthen its balance sheet, PacWest has sold assets, while Banc of California remained profitable during the first quarter.
According to the sources, the acquisition will be supported by equity contributions from private-equity firms Centerbridge and Warburg Pincus, both of which have a history of investing in financial companies. These firms are set to provide the sole external source of funding for the deal.
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