UnionBanCal Corp., which is part of Japan's Mitsubishi UFJ Financial Group Inc., is buying bank holding company Pacific Capital Bancorp for $1.51 billion in order to expand its presence in California.
Under the deal announced Monday, Pacific Capital stockholders will receive $46 per share, which is a 60 percent premium to the company's Friday closing price of $28.69.
Shares of Pacific Capital soared $16.32, or 57 percent, to $45.01 in midday trading.
Pacific Capital currently has 32.9 million outstanding shares, according to FactSet. Its majority shareholder, SB Acquisition Co., approves of the deal.
UnionBanCal said that the deal will make Union Bank the leading bank in the Santa Barbara metropolitan area.
"Santa Barbara and the Central Coast are very attractive regions for banking and wealth management services, and represent an important geographic expansion for Union Bank," Union Bank President and CEO Masashi Oka said in a statement.
UnionBanCal, which is based in San Francisco, had 414 branches in California, Washington, Oregon, Texas and New York and two international offices as of Dec. 31.
Pacific Capital is based in Santa Barbara, Calif. Its primary bank operations are Santa Barbara Bank & Trust NA. The company has 47 branches in eight California counties.
The acquisition is expected to close in the fourth quarter, pending approval of banking regulators.