PacWest stock soars on $1.1b buyout deal with Banc of California

PacWest Bancorp's shares rose nearly 38 per cent in premarket trading on Wednesday, a day after smaller rival Banc of California agreed to buy the lender for $1.1 billion in an all-stock deal, reports Reuters.
Banc of California's shares jumped nearly 13 per cent after the lender said it would pay 0.6569 share to PacWest stockholders for each share they own.
PacWest stock was trading at $10.47, higher than the offer price of $9.60 per share, per calculations based on Banc of California's closing price on Tuesday.
"We believe the sale of PacWest makes sense for shareholders given the numerous struggles the bank has faced since the March banking panic," Raymond James analyst David Long said.
The acquisition also has "strategic merits" for Banc of California, Long added.
"The deal marks a structural transformation for BANC and accelerates its evolution, with a much improved profitability profile exiting 2024."
Analysts have said PacWest's decision last month to sell a $3.54 billion lender finance portfolio to asset manager Ares Management would allay all concerns about the health of its balance sheet.
PacWest has signed a few asset sale agreements to pacify jittery investors and reassure depositors, after it came under pressure following the collapse of three regional lenders earlier this year that prompted the worst industry turmoil since the 2008 financial crisis.