Exclusive: Buyout Giants Plot Joint RBS Bid
Two titans of Wall Street's buyout industry have teamed up to bid for hundreds of British bank branches owned by the state-backed Royal Bank of Scotland.
I have learned that Leon Black, the head of Apollo Global Management, and Christopher Flowers, founder of the private equity group JC Flowers & Co, are to form a joint venture in an attempt to acquire the 316 branches.
The powerful alliance between two of the wealthiest financiers in the US will provide Royal Bank of Scotland (RBS) with some much-needed competitive tension as it tries to drum up interest in the business.
A previous sale to Santander UK, the British arm of the Madrid-based banking giant, collapsed in October amid recriminations over the IT systems supporting the branch network.
It is unclear how much the RBS business will fetch after Santander UK whittled the price down several times before walking away from the deal altogether.
Initially valued at £1.6bn, the branches have a book value of about £1bn.
Recent deals for UK bank assets have valued them at discounts to book value because of ongoing regulatory uncertainty and concerns about the economic environment.
Other parties have signalled an interest in bidding for the RBS branches, including Nationwide, AnaCap Financial - the owner of Aldermore Bank, and Corsair Capital, another private equity firm.
JC Flowers already has a UK banking presence through OneSavings Bank, which was created through a deal to take control of Kent Reliance Building Society.
If the pair are successful with a combined bid for the RBS branches, Apollo and JC Flowers would probably seek to merge the businesses.
JC Flowers declined to comment, while Apollo could not be reached for comment.