Levene’s British bank venture NBNK confirmed yesterday it had put in a formal bid for the 632 branches that Lloyds Banking Group is selling, with the amount on the table believed to be around £1.5bn.
The NBNK offer is the only formal bid for the Lloyds’ branches so far, with Hugh Osmond’s Sun Capital and Co-operative Financial Services both requesting more time to run due diligence on the assets up for sale.
The package of Lloyds assets on sale was mooted to fetch £2bn in earlier negotiations, but fears over the bank’s funding gap have meant offers are being estimated at much lower than previously thought.
Sources told City A.M. earlier this week that NBNK was unlikely to buy all the assets on offer, instead focusing on mortgages and narrowing a £30bn funding gap in the original package to around £10bn. It would also buy all of the £36bn deposit base.
“NBNK was formed for the purpose of making acquisitions in order to establish a significant UK retail bank and confirms that it has submitted a bid for Verde,” it said in a statement.
If all the assets are bought, the eventual winner of the auction – dubbed Project Verde – will automatically have the opportunity to create the UK’s seventh largest bank, bagging 4.6 per cent of personal current accounts and five per cent of the mortgage market.
European regulators ordered Lloyds to sell the branches as part of a regulatory package agreed after the bank was bailed out with taxpayers’ money during the 2008 credit crisis.
MEET THE ADVISERS
IAN Soanes, a member of Cenkos’ corporate finance team, is leading the team advising NBNK on its bid for the Lloyds branches.
Soanes was part of the original team that helped Lord Levene launch the banking venture last July, which saw it raise £50m.
Soanes is also busy at the moment advising Omega Insurance on its takeover, with three bids currently on the table from Barbican Insurance, a private group backed by Carlson Capital, privately held insurer Canopius Group and Mark Byrne’s Haverford Bermuda Ltd.
He also works with a range of fast-growing property and tech companies.
He advised Assura on the sale of its medical business to Virgin, and has continued to work for the UK’s biggest healthcare property owner, helping it with some small disposals earlier this year. He also helped raise £23m for real estate investor NewRiver Retail in 2009.