Wilbur Ross is taking a stake in New Jersey based Sun Bancorp (SNBC, Financial). Here is the details according to the Sun Bancorp’s website:
Ross was seen in CNBC discussing the transaction. At $4 per share, the transaction is conducted at half the tangible book value of the bank. According to Ross, the discount is to compensate for possible losses in case the housing market goes south further. As a matter of fact, at this price, as long as the housing market drops less than another 10%, Ross thinks the deal makes sense for him.
Ross also expressed his opinion towards the shape of economic recovery. He does not think a double dip recession is in order, however, the economy will wobble around in the near term.
He does not think Europe, especially southern part of it, is out of the wood yet in their financial crisis.
VINELAND, N.J., July 8 /PRNewswire-FirstCall/-- Sun Bancorp, Inc.(Nasdaq: SNBC)today announced the signing of definitive investment agreements with private equity funds affiliated with WL Ross & Co. LLC , the Bank's founding Brown Family shareholders, and others, to invest $100 million in the aggregate in shares of the Company's common stock and newly authorized preferred stock that is mandatorily convertible into common stock upon the receipt of shareholder approval, all as part of the Company's strategic growth plan. The shares to be purchased by WL Ross will represent 24.9% of the Company's outstanding common stock, pro forma for the closing and assuming the conversion of the convertible preferred stock. The investment was made at $4.00 per share.
Ross was seen in CNBC discussing the transaction. At $4 per share, the transaction is conducted at half the tangible book value of the bank. According to Ross, the discount is to compensate for possible losses in case the housing market goes south further. As a matter of fact, at this price, as long as the housing market drops less than another 10%, Ross thinks the deal makes sense for him.
Ross also expressed his opinion towards the shape of economic recovery. He does not think a double dip recession is in order, however, the economy will wobble around in the near term.
He does not think Europe, especially southern part of it, is out of the wood yet in their financial crisis.
