Community bank PacWest Bancorp (PACW.O) said on Thursday it would buy fellow California-based lender CU Bancorp (CUNB.O) in a cash-and-stock deal valued at about $705 million, as it seeks to strengthen its presence in southern California.
PacWest offered 0.5308 of its shares and $12 in cash for each CU Bancorp share, which translates to an offer price of $39.45 per CU Bancorp share.
CU Bancorp's shares closed at $39.50 on Wednesday.
The combined company will have 87 branches and about $25 billion in assets.
CU Bancorp owns California United Bank, a private lender to small to medium sized businesses in southern California. PacWest Bancorp operates throughout California through its sole unit, Pacific Western Bank.
The deal is expected to close in the fourth quarter this year, the banks said.
Keefe, Bruyette & Woods was financial adviser to CU Bancorp, while Sandler O'Neill + Partners LP advised PacWest.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta and Sai Sachin Ravikumar)