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BankUnited Shares Rise 5% on First Day

BankUnited’s public offering received a warm reception on Friday morning, as shares rose nearly 5 percent to around $28.25 in the first few hours of trading.

As with other I.P.O.’s this week, BankUnited, a Florida-based lender, priced its offering higher than expected at $27 a share, raising about $780 million. BankUnited previously predicted a range was $23 to $25 a share.

The healthy demand for the bank, which filed for bankruptcy 18 months ago, is yet another encouraging sign for the I.P.O. market.

The sector has enjoyed a string of strong debuts this week, including the online content creator Demand Media and Nielsen, the year’s first billion-dollar-plus offering. Like BankUnited, both Demand Media and Nielsen priced above their anticipated range.

Nielsen, which is owned by a group of private equity firms, priced at $23 a share on Wednesday and raised $1.9 billion. After two days of gains, shares of the consumer ratings company were trading slightly lower on Friday, down about 1.5 percent in morning trading to around $25.

Demand Media, which priced its shares at $17, rose to nearly $24 this week, before settling around $21 on Friday morning.
BankUnited’s owners — a consortium of buyout firms that includes Wilbur L. Ross Jr., the Blackstone Group, the Carlyle Group and Centerbridge Partners — will profit handsomely from the offering. The investors, who injected $900 million into the bank in 2009, sold about 22 million shares as part of the I.P.O. Mr. Ross and the Blackstone Group sold about about 5.1 million shares, putting them in line for a $137.7 million pay day. Each will retain a 15.9 percent stake.

Paul Schaye, a founding partner of advisory firm Chestnut Hill Partners, said the strength in I.P.O. pricing was very encouraging for private equity firms, which have struggled to take companies public in recent years.

“This is a sign that things are coming back, that private equity firms are not just passing off goods in the food chain — I think everyone is breathing a sigh of relief,” he said.

Even so, private equity firms are managing their expectations. While a 40 percent return on investment may have been common in the frothy years preceding the financial crisis, said Mr. Schaye, “the new normal is about 20 percent.”