Bank buyout offer withdrawn.

Doral Financial Corp., the Puerto Rican bank-holding company facing insolvency, said its second-largest shareholder has withdrawn a buyout offer and will support a rival bid. The company's shares tumbled 31%, reports Bloomberg (June 26, 2007). FBOP Corp., a bank-holding company based in Oak Park, Illinois, dropped its proposal to buy 80% of the company for US$610 million, Doral said. FBOP said it will vote in favor of a competing offer from a group led by New York-based Bear Stearns Cos., which amounted to US$610 million for 90% of the company, or 63 cents a share. Doral said in April it would probably have to file for bankruptcy protection unless talks with a private-equity firm resulted in a cash infusion of at least $700 million. Shareholders were scheduled to vote on the remaining takeover offer at Doral's annual meeting on July 17, three days before the company must make a US$625 million bond payment. Doral's shares lost three-quarters of their value in the past year as analysts began questioning its method of calculating profit from mortgage sales, and the US Securities and Exchange Commission opened an investigation into a related earnings restatement.