Goldman Sachs yesterday emerged as a possible contender to buy Barclays' iShares business, which the bank is trying to sell to boost its capital position.
Barclays, which is racing to sell the business by next week ahead of the deadline for applying for the Government's asset protection scheme (APS), is expecting all those interested in the business to submit binding bids early this week, and Goldman is understood to be one of the parties that could table an offer.
Other bidders include the US-based buyout firm Hellman & Friedman, which is leading a consortium which includes rival buyout firms. While buyout firms are having trouble competing in auctions because of the paucity of debt available, Barclays is offering vendor finance – or a loan to help buy iShares.
Vanguard, a UK asset management company, is also a possible bidder, people close to the matter said. Barclays, Hellman & Friedman, Goldman and Vanguard declined to comment.
Barclays could announce a deal by the end of this week. Analysts at Credit Suisse, Barclays' joint broker, said the bank's management accepted they needed more core capital to retain confidence, whether or not Barclays joins the APS.
The analysts said Barclays was unenthusiastic about the APS terms offered to Lloyds Banking Group because Barclays would need seven straight years of 1992 losses to make the insurance pay.
The analysts said Barclays could need £8bn of new capital but that a sale of iShares and the bank's own cash generation might allow it to trade its way through the crisis. After making a point of turning down state capital, Barclays is trying to avoid taking Government money unless it can show that the terms are attractive.
The bank's shares rose 15.7 per cent to 121.5p, the highest closing price since mid-January, driven by the US plan to clean up banks' balance sheets. The bank's market value was £10.2bn.Reuse content