Lloyds Banking Group is understood to be moving closer to a deal to sell Scottish Widows Investment Partnership (Swip) as it looks to streamline its business and bolster its finances.
Speculation has been mounting in recent weeks that a deal to dispose of the fund management arm of Scottish Widows is nearing, with suggestions now that it could be announced as soon as the end of October.
A host of potential suitors has been linked with a deal including Aberdeen Asset Management, although its finance director Bill Rattray had said earlier this year that Aberdeen was “unlikely” to look at Swip.
A tie up between the two Scottish fund managers would almost double Aberdeen’s funds under managment and make it the largest stockmarket-listed fund manager in Europe. Swip manages £146 billion and Aberdeen just over £200bn. Others placed in the frame include Australian investment bank Macquarie, the Royal Bank of Canada and French bank Natixis.
It first emerged in April that Lloyds was considering the sale of Edinburgh-based Swip, led by managing director Dean Buckley, after privately deciding the business is possibly non-core to the part-taxpayer-owned bank’s future. Lloyds hired investment bankers at Deutsche Bank to assess appetite in the market. US-based Ameriprise was believed to be one of the early leaders with other possible bidders named as fellow American financial major BlackRock.
Foreign takeovers of British fund management names in the past two decades have included Chase Manhattan’s £4.8bn move on Robert Fleming; Swiss Bank Corporation’s £860m swoop on Warburgs and Merrill Lynch’s £3bn acquisition of Mercury Asset Management.
The speculation over a Swip deal came as reports also emerged yesterday that Westpac Banking Corporation had submitted a bid for Australian assets being sold by Lloyds, joining Pepper Australia and Macquarie Group in the bidding. Lloyds is selling corporate loan, motor and equipment financing businesses in Australia with a face value of some £4.89bn.