Centerbridge Swoops For RBS Branch Network
An American investment group has become the latest prospective buyer to show its hand in the auction of more than 300 Royal Bank of Scotland (RBS) branches.
I understand that Centerbridge Partners, a private equity firm and hedge fund manager, has joined forces with Corsair Capital, another buyout firm, to lodge an offer for the branch network being offloaded by the taxpayer-backed bank.
Centerbridge and Corsair have come together in recent weeks, according to insiders, but it is unclear whether they will make a formal offer for the business, which RBS has given the code-name Project Rainbow. The duo are being advised by investment bankers at HSBC.
Corsair's interest in the branches is led by John Maltby, a partner who joined recently from Lloyds Banking Group, the other state-backed bank. Lord Davies, the former trade minister who is a vice-chairman of Corsair, is also taking a keen interest in the situation.
Centerbridge raised its maiden fund, worth $3.2bn, in 2006 and invested capital in companies including Dana, a struggling car parts-maker. In 2010, it acquired a $1bn loan portfolio that had been part of GMAC Financial, a subsidiary of a US group called Ally Financial.
The firm recently opened a European office in London in anticipation of a wave of distressed investment opportunities thrown up by the need for banks to offload hundreds of billions of pounds-worth of non-core assets.
The joint bid from Centerbridge and Corsair is not the only private equity-backed offer for the branches. Apollo Management and JC Flowers, a specialist investor in financial institutions, have also teamed up to bid, while Virgin Money, the banking arm of Sir Richard Branson's empire, is also examining an offer.
Their stiffest competition may, however, emerge from an alternative offer being put together by a group of leading City investors, who are backed by the Pears family, one of Britain's wealthiest.
RBS has to sell the branches in return for the £45.5bn of taxpayers' money it received to rescue it during the banking crisis in 2008. It is supposed to dispose of them by the end of the year but is likely to ask the European Commission for permission to extend that deadline, the bank admitted at its full-year results last month.
Santander UK had been poised to buy the 315 branches but pulled out of a deal last autumn, citing difficulties with the network's IT infrastructure.