Doral Financial, which agreed last month to a buyout led by Bear Stearns' private equity arm, said on Monday it received an unsolicited takeover bid by privately held FBOP Corp., setting up a possible bidding war for the struggling Puerto Rico lender.
Shares of the company surged on the news.
FBOP, an Oak Park, Illinois-based banking company that said it has more than $14 billion of assets, offered to take an 80 percent stake by acquiring $610 million of common stock at $1.41 per share. Existing shareholders would keep the other 20 percent. FBOP said it will also offer a $150 million credit line.
On May 17, Doral said it agreed to sell a 90 percent stake to a group led by Bear Stearns Merchant Banking, which would buy $610 million of stock at 63 cents per share. That transaction was intended to help Doral repay debt that matures on July 20 and avert a possible bankruptcy.
Doral shares rose 40 cents, or 30.8 percent, to $1.70 in morning trading on the New York Stock Exchange.
In a June 1 letter filed with the U.S. Securities and Exchange Commission, FBOP President Robert Heskett said his company's offer constituted a "superior proposal" to the Bear Stearns-led bid.
He said the proposal was superior because it valued Doral shares at a higher price, doubled the stake that existing shareholders would retain, and included more cash.
Doral said it will review the FBOP offer.
The Bear Stearns-led buyout group was not immediately available for comment, but in a letter to Doral, also filed with the SEC, called the FBOP offer "highly contingent if not speculative." Heskett did not immediately return a call for further comment.
According to its Web site, FBOP operates more than 120 branches in six U.S. states, including Park National Bank in Illinois, and California National Bank, Pacific National Bank, San Diego National Bank in California.