UPDATE: Lloyds Bank Continues Talks With 2 Bidders On Branch Sale
November 23 2011 - 6:41AM
Dow Jones News
Lloyds Banking Group PLC (LYG) on Wednesday said it will
continue discussions with two bidders for the 632 branches that it
is selling as a condition of the state aid obtained during the
financial crisis.
It said it received three formal offers for the
branches--code-named "Verde"--but has knocked one of the bidders
out of the process. The bank declined to name the bidders.
Bank acquisition vehicle NBNK Investments PLC (NBNK.LN), which
submitted a bid of around GBP1.5 billion at the end of September,
confirmed that it has been selected to go through to the next stage
in the auction.
"NBNK is delighted to be continuing discussions with Lloyds
Banking Group for the sale of Verde," a spokesman told Dow Jones
Newswires.
"We want to build a nationwide banking business to deliver a
better service to customers and we believe it's time the U.K. had a
new challenger bank with the scale to take on the incumbents," he
added.
The Co-operative Group, which submitted a bid earlier this
month, is the other bidder being taken through to the next round, a
person familiar with the situation told Dow Jones Newswires.
Financial details of the Co-op's bid are unclear, but the
company is keen to boost customer accounts and may be looking to
take on fewer mortgage accounts within the package being sold. This
would reduce the large funding gap between the deposits and loans
being sold by Lloyds, estimated at GBP30 billion. Reports have
suggested the Co-op's offer will make it the front-runner.
The only other potential bidder for the business is Sun Capital
Partners, the investment vehicle run by U.K. entrepreneur High
Osmond, which was interested in the network but had concerns about
the cost of the systems base that would be additional to any offer
for the business.
Final bids are due around Dec. 9, one person said.
Meanwhile, Lloyds said it will also continue preparations for a
potential flotation of the branches and that it will announce its
preferred option by the end of the year.
-By Margot Patrick and Marietta Cauchi, Dow Jones Newswires; +44
(0)20 7842 9451; margot.patrick@dowjones.com
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