Oak Park-based FBOP Inc. on Monday dropped its unsolicited $610 million bid for a controlling stake in financially struggling Doral Financial Inc. of Puerto Rico., Doral announced.

FBOP apparently found something in the course of its "due diligence" review of Doral's financial books that caused it to have reservations about the deal.

By withdrawing its competing bid, the privately owned bank holding company has apparently cleared the way for a leveraged buyout led by private equity interests.

In May, the fiscally distressed Doral agreed to a buyout proposal from a group led by investment banker Bear Stearns. Under that plan, the Bear Stearns group would pay a total of $610 million to purchase a 90 percent stake in doral, at 63 cents a share.

That cash infusion would allow the San Juan-based mortgage and financial-services concern to make a $625 million bond payment that comes due in July, and also to fund a planned settlement of certain shareholder litigation.

But in early June, FBOP offered a competing bid, similarly seeking to buy $610 million of Doral stock -- but at a higher price of $1.41, which would leave existing holders with a 20 percent stake, rather than the 10 percent the Bear Stearns group was offering.

That drove Doral shares higher. But on Monday, Doral disclosed that FBOP, after completing the in-depth financial review known as due diligence, has "decided not to proceed" with its buyout plan.

Instead, Doral said, FBOP told Doral officials in a letter that it intends to vote its 4.6 percent ownership stake in favor of the lower-priced Bear Stearns bid.

In mid-afternoon New York Stock Exchange trading Monday, Doral shares were down 49 cents, or 31 percent, at $1.11; the shares are trading above the only remaining buyout price, suggesting investors think another rival bid may surface.

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