Pizza Express founder makes bid for Lloyds bank branches

Hugh Osmond, the insurance sector investor and founder of Pizza Express, has emerged as the third bidder for 632 branches that Lloyds Banking Group is being forced to sell to comply with EU regulations on state aid.

Mr Osmond, whose previous investments include Punch Taverns, made a formal approach to Lloyds to buy the former TSB and Cheltenham and Gloucester branches earlier this month. His interest follows bids made by Co-operative Financial Services and NBNK, a banking venture set up by Lord Levene.

Mr Osmond is bidding through an acquisition vehicle which is due to float in London later this year in a listing that is expected to raise £500m. If he succeeds, the branches would comprise Britain's sixth largest bank and would be run by Sun Capital, a separate investment firm in which he is a partner.

Lloyds is looking for about £2bn for the branches. This means Mr Osmond would need to raise well over £1bn more to finance his bid.