NBNK submits new offer for Lloyds branches
NBNK Investments Plc, which was formed in 2010 to create a new British bank, has submitted a new offer to buy 632 Lloyds TSB branches from the Lloyds Banking Group.
Lloyds is required to sell the branches under European Commission competition regulations.
In December it named the Co-op Bank as preferred bidder for the so-called ‘Project Verde’ branches, rejecting an earlier bid from NBNK which was believed to be valued at around £1.5 billion.
Lloyds has confirmed that it has received a new proposal from NBNK, but it is continuing its exclusive talks with the Co-op.
The branches must be sold by November 2013 under European rules.
NBNK’s new offer includes a promise to underwrite 100 per cent of the package of branches being sold by Lloyds.
This would give Lloyds’ shareholders the option of receiving cash, shares in a new listed banking group, or a combination of cash and share.
Lloyds’ shareholders include the government, which owns a 41 per cent stake.
The alternative demerger structure proposed by NBNK could value the branches at nearly £2bn.
Lloyds has been preparing for an IPO in case the deal with the Co-op falls through.
Lord Levene, NBNK’s chairman, said: “NBNK offers none of the downsides to Lloyds of a standalone IPO.
“We have the right Board, management, strategy and experience to run and grow a large scale banking operation and achieve our plans for Verde. Our shareholders are strongly supportive of our objectives.”
Lloyds was expected to reveal the final terms of its deal with the Co-op last month but the announcement was delayed.
The Financial Services Authority has pressured the Co-Operative Group to strengthen the level of expertise on its board and the group recently said that a permanent chief executive for Co-op Bank had been identified and was “waiting in the wings”.
The latest proposal from NBNK offers another alternative for Lloyds.