A group of more than 20 fund managers are preparing to table a takeover offer for 315 Royal Bank of Scotland (RBS) branches as suitors line up ahead of this week’s bid deadline, it was reported today.
The consortium, which is being led by Tesco’s former finance chief Andrew Higginson, is thought to be the front-runner to secure the RBS branches.
The state-backed lender is being forced to sell the assets, which comprise 311 RBS branches in England and Wales and five NatWest outlets in Scotland, in return for receiving £45.5bn in UK government aid during the financial crisis.
Spanish bank Santander pulled out of a £1.65bn deal in October and RBS chief executive Stephen Hester has admitted that the group was struggling to find another buyer.
Mr Higginson is said to have secured the backing of some of the UK’s biggest blue-chip institutions for the approach, including Schroders, Invesco Perpetual, Henderson and F&C.
If successful, Mr Higginson - who also ran Tesco’s banking operations - is expected to become chairman of the new bank, with plans to hold the branch network in a listed vehicle funded by the investors.
Other bidders also understood to be in the race ahead of Thursday’s deadline for formal offers include Corsair Capital, which is working with US private equity firm Centrebridge Capital, and a rival private equity team comprising JC Flowers and Apollo.
But RBS, which must sell the branches following its £45.5 billion bailout at the height of the financial crisis, admitted on announcing annual results last month that it was not confident a sale would be successful.
It is also working on contingency plans for a flotation while also considering selling a minority stake to private equity and institutional investors to kick-start the process.
RBS has hived off the branches into a separate arm under the Williams & Glyn’s brand and is offering it as a business with around £20 billion of deposits and loans, 1.7 million retail customers and 240,000 small-business clients.