Former Tesco Bank chairman Andrew Higginson has lined up fund managers including Lansdowne Partners, Schroder and Threadneedle to back next week’s listing of his investment vehicle to buy branches from Royal Bank of Scotland (RBS).
RBS is being forced to sell 316 branches and the Williams & Glyn (W&G) brand by the European Commission after its £45 billion taxpayer bailout in 2008.
Higginson’s W&G Investments is poised to raise a modest £15 million when it joins the Alternative Investment Market (Aim) on Tuesday.
If RBS chooses to sell the branches to W&G then the cash shell would look to place further shares and switch to the London Stock Exchange’s main market.
Reports have suggested that W&G has offered about £1.1bn up front, plus a further £400m paid out of the business’ profits at a later date. The bidder is expected to make a formal offer next week.
Ex-Tesco Bank IT director Shaun Doherty and non-executive director John Reed have joined Higginson on the board of W&G, along with RBS veteran John McGuire.
A deal to sell the “project rainbow” branches to Santander collapsed in October.
RBS has until the end of the year to sell the branches, although it could request an extension or spin the unit out as a separate company on the stock market, as it did with its Direct Line insurance business.
No deadline has been set for bids, although RBS is believed to want to reach a decision before the end of the month.
W&G faces competition from two consortia – AnaCap and Blackstone have chosen former Lloyds TSB second-in-command Mike Fairey to lead their bid, while Edinburgh-based Standard Life and the Church of England are backing a bid by American investment houses Corsair and Centrepoint.
The European Commission has also ordered Lloyds Banking Group to sell 631 “project verde” branches. After a deal to sell them to the Co-operative Bank collapsed, Lloyds now plans to float them on the stock market under the TSB brand.