THE Royal Bank of Scotland has whittled down its shortlist of bidders for the 316 branches it has been forced to sell by European regulators.
It is understood the bank has informed private equity firm JC Flowers and its partner, Apollo Global, that they are out of the running for the business.
A shortlist of three bidders remains, including a consortium led by former Tesco finance director Andrew Higginson and another from Corsair Capital backed by Standard Life. A third from Anacap Financial Partners, which is behind UK challenger bank Aldermore, has also confirmed it is still involved in the bid process which is required to complete by the end of the year.
The sale of the branches, dubbed “Project Rainbow”, has been on the cards since the European Commission forced RBS to sell assets as a result of its £45 billion bail out during the banking crisis. A £1.7bn deal to sell the branches to Santander collapsed last October over concerns about merging IT systems.
The difficulty of selling off branch assets became clearer after the Co-operative Bank failed to pull off a £750 million deal to buy 632 branches from Lloyds Banking Group. As a result, Lloyds confirmed it will press ahead with an initial public offering (IPO) of the business. It too has been forced to divest the assets as a result of receiving state aid. If the shortlisted bidders fail to lodge acceptable offers, RBS will proceed with its backup plan of floating Rainbow on the London Stock Exchange.
The consortium backing Higginson includes a range of City groups such as Aviva, Invesco Perpetual, Threadneedle and Schroders.
Corsair is working on a bid with fellow private equity groups, Centerbridge and Lord Jacob Rothschild’s RIT Capital.