- PacWest Bancorp is exploring strategic options, including a potential sale, amid plummeting shares and pressure.
- The company confirms interest from multiple investors and partners, committed to enhancing shareholder value.
- Bank’s stock price drops by over 40% following disclosure of potential sale and U.S. Fed’s rate hike.
PacWest Bancorp is exploring strategic options following the collapse of First Republic Bank. As its shares continue to plummet, the bank has announced that it is in talks with various investors and potential partners, including the possibility of a sale.
PacWest Bancorp issued a statement on Wednesday confirming that it is following standard procedures by continually reviewing strategic options with its board of directors. The statement also indicated that the company had received interest from multiple potential partners and investors, with ongoing discussions taking place. PacWest Bancorp remains committed to considering all available options in order to enhance shareholder value.
Meanwhile, on May 4, PacWest Bancorp’s (PACW) shares dropped by more than 40% to around $4 during pre-market trading hours. This decline occurred in the wake of PacWest’s disclosure of a potential sale and the U.S. Federal Reserve’s decision to raise interest rates by an additional 25 basis points on Wednesday. These developments have placed PacWest under significant pressure.
Additionally, in May, PacWest Bancorp confirmed that it has engaged in discussions with several potential investors, as reported earlier. The bank is seeking strategic options to reassure the markets after its stock price plummeted by 60%, which has raised concerns among depositors and investors about the overall health of banks in the US.
PacWest noted,
The bank has not experienced out-of-the-ordinary deposit flows following the sale of First Republic Bank and other new. Our cash and available liquidity remains solid and exceeded our uninsured deposits.
On the other hand, on March 20, PacWest Bancorp experienced a significant withdrawal of $6.7 billion worth of deposits. In addition, on March 13, the bank’s share trading was halted when its shares fell by 52% following the collapse of several crypto-friendly banks, including Silvergate, Silicon Valley Bank, and Signature.
These events have contributed to concerns about the stability of PacWest Bancorp and its potential impact on the broader financial system.
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