UPDATE 2-First BanCorp rejects Doral Financial’s $96 mln offer

* Doral Financial offers $0.30/shr for First BanCorp

* Offer at 14 pct premium to First BanCorp’s Fri close

* First BanCorp says proposal not in best interest

* First BanCorp to continue capital plan
(Adds details, analyst comments; updates share movement)

By Jochelle Mendonca

BANGALORE, Dec 6 (BestGrowthStock) – First BanCorp Inc (FBP.N: )
received a $96 million unsolicited offer from Doral Financial
(DRL.N: ), but the No. 2 Puerto Rican bank by assets rejected the
bid, saying it would rather continue with its planned capital

First BanCorp, the holding company for Firstbank, has to
raise $350 million as part of the conditions to convert $424
million of its preferred stock held by the U.S. Treasury into
common stock. [ID:nWNAB6352]

“Given the situation that Firstbank is in, I am a little
surprised that they rejected the offer,” Keefe, Bruyette and
Woods analyst Bain Slack told Reuters.

Doral’s offer of 30 cents a share in an all-stock deal
represents a 14 percent premium to First BanCorp’s Friday close
of 26 cents.

Doral’s proposal indicates that it will raise $550 million
prior to the transaction and reach a new agreement with the
U.S. Treasury to exchange First BanCorp’s preferred stock into
shares of the combined company at a discount, First BanCorp
said in a statement.

The offer marks the second time Doral, the No. 3 player in
Puerto Rico, has attempted to increase its market share on the

In April, Doral raised $420 million to take part in
regulator-backed acquisitions, but its bid was unsuccessful.

Slack said he expects the equity raise to be challenging
for Firstbank and does not expect Doral to make a counter offer
in the absence of another bidder.

“I think they’d wait to see how the $350 million equity
raise goes for Firstbank. If it does not go well, the board of
Firstbank may not have a choice but to reconsider the offer,”
Slack said.

The Puerto Rican banking sector has already seen
consolidation this year, when the Federal Deposit Insurance
Corp seized lenders controlling about 20 percent of the banking
assets on the island, and about a quarter of the deposits.

Shares of First BanCorp were trading up 13 percent at $0.30
in morning trade, while those of Doral were down about 1
percent at $1.38 on Monday on the New York Stock Exchange.

First BanCorp shares have dropped more than 82 percent
since the company unveiled the capital plan on June 4.
(Reporting by Archana Shankar in Bangalore; Editing by Anne
Pallivathuckal, Roshni Menon)

UPDATE 2-First BanCorp rejects Doral Financial’s $96 mln offer