Florida’s BankUnited drew bids from two other groups besides the winning consortium of private equity powerhouses in the FDIC-run auction. 

The other two bidding groups included J.C. Flowers & Co and Toronto Dominion bank, according to sources familiar with the matter.

Regulators seized the troubled Florida lender last month and sold it to a consortium that includes Wilbur Ross’s WL Ross, Carlyle Group, Blackstone and Centerbridge Partners.

Private equity firms have increasingly turned their attention to banking as the number of troubled U.S. banks and thrifts increases, although BankUnited was not the first failed bank to be bought by private investors.

Hedge fund and private equity investors, including Flowers, bought the assets of failed U.S. mortgage lender IndyMac earlier this year, for example.

Have two big Japanese lenders, backed by private equity, found a way to come up with a sensible merger plan? A merger between Shinsei Bank, nearly a third-owned by JC Flowers, and Aozora Bank, more than half-owned by Cerberus, is reported back on track after the Western firms cooled their jets on the deal last month, saying there was no strategic plan behind the tie-up.

Shares of both institutions have been on a tear since talk of a merger bubbled up last month, but are mere shadows of what they were earlier in the decade after their sale to private equity marked a fresh stab at rehabilitation in the Japanese banking industry. Just about the only thing going obviously well for the investments right now, aside from the merger bump, is the strength of the yen.

The banks plan to set up a holding firm in 2010 and merge a year or so later, the Nikkei Business Daily reported. JC Flowers and Cerberus will probably remain shareholders in the holding firm, according to the report, so this wouldn’t be a big cash-out for either.

Pooling their expertise make sense in Japan, where foreign ownership of local institutions has had a history of causing more friction than warmth. Analysts say the merged bank — which would be Japan’s sixth-biggest — would still need government money and face a huge challenge to win over depositors from the country’s megabanks.

Deals of the Day:

* A consortium of 11 banks and interdealer broker ICAP has bid 813 million euros ($1.07 billion) for LCH.Clearnet, Europe’s top independent clearing house, a source close to the consortium said.

* French energy giant EDF agreed to sell a stake in nuclear operator British Energy to Centrica, striking a partnership with the gas group to build a new generation of nuclear power stations in the UK. Centrica will pay 2.3 billion pounds ($3.4 billion) for the 20 percent stake.

* Shinsei Bank and Aozora Bank have agreed to merge around the middle of next year, the Nikkei business daily reported on Monday, a move that would form Japan’s sixth-largest bank.

* Australian brewer Lion Nathan has agreed the terms for a $2.5 billion takeover by Japanese brewer Kirin, which is making an aggressive push into Asian markets.

* Mitsubishi UFJ Financial Group Inc’s trust banking unit said it is still planning a $254 million purchase of Citigroup’s Japanese trust bank, denying a report that the deal was about to be derailed.

* Despite major social problems, now is the moment to create a big European car maker by combining Italy’s Fiat with the European operations of General Motors, including its German brand Opel, Fiat’s chief executive said.

(PHOTO: A man walks past a Shinsei Bank signboard at its branch in Tokyo April 27, 2009. REUTERS/Kim Kyung-Hoon)

Citigroup is eyeing a break-up or sale of its business in Germany as part of a global reorganization, sources familiar with the matter have told Reuters. Citi’s German unit, which makes most of its money from loans for everything from televisions to cars, contributed nearly 3 percent of the bank’s global pretax profit in 2006. Citi’s manager in Germany wrote to staff in March, saying the unit would not be sold, but he was replaced last week.

Lehman Brothers has been taking advantage of the Fed’s new borrowing window for investment banks, the Wall Street Journal reported, by using some of the same financial engineering methods that have brought so much chaos to the financial system. In a nutshell: Move $2.8 billion in unattractive debt into a new investment vehicle, get a AAA credit rating, and use as collateral to borrow much-needed cash from Uncle Sam. Fed officials had been worried that the new borrowing window might carry a stigma, but as it turns out, not so much.

U.S. buyout group J.C. Flowers is prepared to walk away from takeover target Friends Provident, frustrated at a lack of contact with the British insurer’s management. “There is no light at the end of the tunnel,” a source close to the matter told Reuters on Friday. Flowers has a regulatory deadline of April 30, by which time it must either make a firm takeover bid or walk away.

Frontier Airlines Holdings filed for bankruptcy protection on Friday, citing unexpected problems with its credit card processor, but said it would operate its flights normally. The low-cost carrier’s attempts to operate normally despite its troubles sets it apart, at least for now, from Aloha Airlines, Champion Air, ATA Airlines and Skybus Airlines — all of which said last week that they would stop flying.

** Virgin Blue Holdings Ltd, Australia’s second-biggest airline, said on Friday a strategic review found buyer interest in airline undervalued the business, and it would not pursue a change of control.
** Philips Electronics NV said it agreed to acquire Chinese patient monitoring company Shenzhen Goldway Industrial Inc. Financial details of the transaction were not disclosed
** London-listed Econergy International said a 27.5p/share all-share approach from carbon credit developer Trading Emissions undervalued the Colorado, United States-based, company.
** Norwegian solar industry group Renewable Energy Corp has acquired 20 percent of U.S. company Mainstream Energy LLC for about $40 million, the company said.
** Electricite de France is drawing up plans to make an offer of more than 700 pence a share for nuclear power firm British Energy, the Times newspaper said on Friday.
** India’s Essel Propack Ltd and Ess Dee Aluminium are jointly bidding for the packaging unit of Rio Tinto, the Economic Times said on Friday.
** Yahoo Inc may have played its top two cards by pulling out possible deals with AOL and Google, but it does not seem to have changed Wall Street’s view that Microsoft will eventually win the takeover battle.
** Quebec’s securities regulator has approved the C$1.02 billion cash and stock takeover of the Montreal Exchange by TSX Group, owner of the Toronto Stock Exchange, saying it is satisfied the combination will produce benefits.
** H&R Block Inc chairman and activist investor Richard Breeden raised his stake in the tax preparer for the second time in a month, bringing his total ownership in the company to 3.2 percent.