UPDATE: Citi Downgrades CapitalSource on Merger

In a report published on Wednesday, Citi analyst Donald Fandetti downgraded CapitalSource CSE from Buy to Neutral and raised the [roce target from $9 to $12.

In the report, Citi noted, "We are downgrading shares of CSE to Neutral (2) from Buy (1). We are raising our target price to $12 (1.7x Q2'13 stated TBV), which reflects expected consideration to CSE shareholders for the merger. As a reminder, shareholders are expected to receive $2.47 in cash and 0.2837 shares of PACW common stock, or $11.68 based off of PACW's 7/22 closing share price".

CapitalSource closed on Tuesday at $11.97.