Bloomberg News

Spain's second-largest bank was selected to take over the assets of Guaranty Financial Group Inc. in a government-assisted transaction, according to people familiar with the situation.

The Austin, Texas, lender said last month that it was unable to raise capital as demanded by regulators and would probably fail. The Office of Thrift Supervision has taken over board functions, directed the bank to turn itself over to the Federal Deposit Insurance Corp. and is pursuing transactions likely to wipe out shareholders, Guaranty said in a July 23 filing with the Securities and Exchange Commission.

Bids for the bank were due Tuesday, the people said.

Ed Bilek, a spokesman for Banco Bilbao Vizcaya Argentaria, and FDIC spokesman Andrew Gray declined to comment. A call to Guaranty spokesman John Wessman wasn't immediately returned.

Blackstone Group, Flexpoint and U.S. Bancorp were among other groups considering bids for assets of Guaranty, people familiar with the situation said. Guaranty's biggest shareholders include billionaire Carl Icahn and Omni Hotels owner Robert Rowling.

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