NBNK seeks investment for new Lloyds bid
NBNK Investments Plc is reported to be talking to Middle Eastern sovereign wealth funds with a view to increasing its bid for 632 branches being sold by Lloyds Banking Group.
Lloyds has been in exclusive talks with the Co-operative Group over the ‘Project Verde’ business since December, but announced on Friday that these talks had ended.
It is selling the branches to meet European Commission competition rules following its bailout by the last government and has until November 2013 to complete the sale.
In a statement Lloyds said: “The group continues to have productive and meaningful discussions with the Co-operative Group, its preferred buyer for the Verde business.
“However, LBG (Lloyds Banking Group) is no longer holding these discussions under an exclusivity agreement”.
Lloyds went on to say that it would now consider alternative bids and would talk to NBNK if it could be confident that regulatory clearance would be given for a deal.
Last month Peter Marks, chief executive of the Co-operative Group, cast doubt on the group’s bid when he warned that significant economic and regulatory issues still needed to be addressed before a deal could go ahead.
The regulator had expressed concern about the Co-operative Group’s complex structure, its capital position and whether its management team had sufficient experience of banking.
Yesterday the Telegraph reported that NBNK is holding talks with Qatar Holding LLC and Abu Dhabi’s Mubadala Development Co.
A deal with the two wealth funds could allow NBNK to increase its offer for Project Verde; a £1.5 billion offer from NBNK was turned down by Lloyds last year.
NBNK was established in 2010 with the aim of creating a new UK retail bank which would increase competition on the High Street.
It is chaired by former Lloyd’s of London insurance head Peter Levene and its CEO is former Barclays and Northern Rock executive Gary Hoffman.
If Lloyds fails to find a suitable buyer for Project Verde it could spin off and float the business.