HomeStreet slumps as buyout deal faces regulatory hurdles

Mechanics Bancorp

30/10/2024 18:14

** Shares of regional lender HomeStreet  HMST.O  slide as
much as 37.4%, last down 34.2% at $19.16
    ** Regulatory approvals necessary for the buyout deal have
not been obtained from the Federal Reserve and the Texas
Department of Banking, FirstSun Capital Bancorp  FSUN.O  and
HomeStreet said late Tuesday, adding that they have been asked
to withdraw their applications
    ** FSUN and HMST are mulling pursuing an alternative
regulatory structure for the transaction, the companies said,
adding that they are also discussing terms for terminating the
deal if there is no feasible resolution  
    ** In January, FSUN had agreed to buy HMST for $14.75/shr
    ** Remain hopeful that we will be able to continue
productive discussions with regulators in order to obtain
regulatory approval - FSUN CEO Neal Arnold
    ** Wedbush Securities believes HMST might seek a different
suitor in the coming months, adding that it finds the
announcement as an incremental negative read-through for broader
bank M&A
    ** Piper Sandler believes HMST might have to pursue a
dilutive capital raise with new and existing shareholders if the
deal fails
    ** As of last close, HMST shares up 35.1% YTD

 (Reporting by Arasu Kannagi Basil in Bengaluru)
 ((ArasuKannagi.Basil@thomsonreuters.com;))