Lloyds close to sell-off of HBOS assets

LLOYDS Banking Group is inching closer to a decision on the disposal of its HBOS Integrated Finance investment vehicle, over a year after the division was first put up for sale as part of a drive
to manage down the bank’s balance sheet in the wake of the crisis.

Lloyds is in discussions with a number of private equity bidders, including secondary market specialist Coller Capital, about a potential deal expected to be sealed within weeks.

If sold, HBOS Integrated Finance is expected to fetch around £500m, though the bank is thought to be holding out on the possibility of creating a joint venture or selling a majority stake in the vehicle in place of an outright sale.

Chief executive Eric Daniels has previously indicated the price offered would have to be attractive to persuade Lloyds to accept a deal.

The integrated finance division was set up in February 2000 to invest in mid-market management buyout opportunities. Its investments, which totalled well over £10bn, included deals with health club chain David Lloyd Leisure, cinema group Vue Entertainment, shirtmaker TM Lewin and the Sunseeker yacht company.

The investments were made under the watch of Peter Cummings, who stepped down in January last year as head of the corporate division at HBOS after his aggressively expansionary strategy was partly blamed for helping rack up the bad debts that brought the lender to its knees.

Edouard De Vitry
Co-Head of Financial Institutions in Europe, UBS

WHEN Lloyds last year decided to sell off its portfolio of investments in some of the UK’s best-known companies, it brought in the big guns for a spot of advice.

The bank originally turned to Rothschild for counsel on how to deal with the HBOS Integrated Finance division, before appointing UBS to conduct a strategic review of its options at the beginning of last year.

Responsibility for weighing up the future of the division fell to the financial institutions group (FIG) at UBS, which is headed in Europe by Ian Gladman and Edouard de Vitry.

The duo moved to their current positions two years ago following the defection of FIG global co-head Olivier Sarkozy to Carlyle Group.

Both are seasoned bankers of some renown: Gladman joined UBS in 1995 and moved to be head of corporate finance in South Africa between 1998 and 2001, returning in 2001 to join the FIG team, latterly as head of insurance for the EMEA region. De Vitry, meanwhile, started his banking career at JP Morgan before joining UBS in 1997, where he has since set up and developed the firm’s financial technology practice in Europe.