However the tie-up between PacWest and Banc of California turns out, it’s already a marvel of financial engineering.
The two banks are structuring their deal, announced late Tuesday, as a reverse merger. That means PacWest shareholders will receive Banc of California stock when the deal closes—making Banc of California the so-called legal acquirer.
PacWest, though, will be designated as the acquirer for accounting purposes, which means it will absorb Banc of California’s assets and liabilities onto its own balance sheet. The combined company will be called Banc of California.