LONDON -(Dow Jones)- Middle East-based sovereign wealth funds including Qatar Holdings and Abu Dhabi-based Mubadala Development Company have held talks with NBNK, the U.K. bank bid vehicle which is trying to buy a package of 632 Lloyds Banking Group PLC (LLOY.LN) branches, the Sunday Telegraph reports without citing sources.
The talks are about funding to support the bid to buy the branches, dubbed Project Verde. Success in securing the funding would be a major boost to NBNK's hopes of winning support from Lloyds' board, the newspaper says.
A spokesman for NBNK declined to comment Sunday on the status of talks with existing or potential investors.
Lloyds last week ended its previously exclusive talks with the Co-operative Bank PLC (CPBB.LN), which had been the frontrunner to acquire the branches.
This clears the way for Lloyds to re-open talks with NBNK, which had been a keen bidder for the business before the Co-operative Group won exclusivity four months ago.
Lloyds, which is 40% owned by the U.K. government following a bailout during the financial crisis, said Friday it would continue to talk to the Co-op and would talk to NBNK only on condition that its proposal was deemed likely to clear regulatory hurdles.
Primary among these, according to the Sunday Telegraph, is capital strength. Securing funding from investors would significantly increase NBNK's ability to meet these concerns.
Lloyds is selling the branches to meet regulatory demands imposed as a condition of receiving the bailout money.
Earlier this month NBNK, which previously had a GBP1.5 billion offer for the branches rejected, sweetened its bid by giving Lloyds shareholders the option of getting paid cash or receiving a stake in the new bank that NBNK would create.
NBNK would also take on board some of the costs of splitting off the 632 branches. The revised bid would increase to between GBP1.5 billion and GBP2 billion, a person familiar with the matter told Dow Jones Newswires at the time.
NBNK was set up two years ago by Peter Levene, the former chairman of the Lloyds of London insurance market that is unrelated to Lloyds Banking Group, and other former bankers, to attempt to win a foothold in the U.K.'s retail banking market.
foxbusiness.com
The talks are about funding to support the bid to buy the branches, dubbed Project Verde. Success in securing the funding would be a major boost to NBNK's hopes of winning support from Lloyds' board, the newspaper says.
A spokesman for NBNK declined to comment Sunday on the status of talks with existing or potential investors.
Lloyds last week ended its previously exclusive talks with the Co-operative Bank PLC (CPBB.LN), which had been the frontrunner to acquire the branches.
This clears the way for Lloyds to re-open talks with NBNK, which had been a keen bidder for the business before the Co-operative Group won exclusivity four months ago.
Lloyds, which is 40% owned by the U.K. government following a bailout during the financial crisis, said Friday it would continue to talk to the Co-op and would talk to NBNK only on condition that its proposal was deemed likely to clear regulatory hurdles.
Primary among these, according to the Sunday Telegraph, is capital strength. Securing funding from investors would significantly increase NBNK's ability to meet these concerns.
Lloyds is selling the branches to meet regulatory demands imposed as a condition of receiving the bailout money.
Earlier this month NBNK, which previously had a GBP1.5 billion offer for the branches rejected, sweetened its bid by giving Lloyds shareholders the option of getting paid cash or receiving a stake in the new bank that NBNK would create.
NBNK would also take on board some of the costs of splitting off the 632 branches. The revised bid would increase to between GBP1.5 billion and GBP2 billion, a person familiar with the matter told Dow Jones Newswires at the time.
NBNK was set up two years ago by Peter Levene, the former chairman of the Lloyds of London insurance market that is unrelated to Lloyds Banking Group, and other former bankers, to attempt to win a foothold in the U.K.'s retail banking market.
foxbusiness.com
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