Rival offer tabled for Lloyds branches
Thursday 12 April 2012
The Co-op's stalled acquisition of 632 bank branches being sold by Lloyds was under further pressure today after a rival tabled a renewed offer.
NBNK, which is headed by former Northern Rock boss Gary Hoffman, has offered to underwrite a deal that would see the branches floated on the stock market to create the UK's first 'no bonus bank'.
It said the deal would see no redundancies or branch closures and would create the first listed bank dedicated to personal banking and small businesses.
The Co-op was named as preferred bidder for the branches Lloyds has to offload as a penalty for its taxpayer bailout, but the deal is being held up by protracted talks with regulators.
Lloyds, which is 40% owned by the taxpayer, said it remained in exclusive talks with the Co-op but was also preparing to float the business - known as Project Verde - on the stock market should the deal fall through.
Lloyds and the Co-op were supposed to reach an initial agreement by the end of March but this has been delayed amid questions over whether the buyer has an experienced team and the right structure to run the enlarged business.
Co-op chief executive Peter Marks recently hit back at critics, saying: "We know how to run a bank."
The assets being sold account for a 4.6% share of the UK current account market and up to 19% of Lloyds' mortgage book, with around five million customers.
NBNK said its revised offer would give Lloyds none of the costs or uncertainties of floating the business itself and would give it the option of taking cash or shares in the new company.
Mr Hoffman said: "Our objective is to create a new, large challenger bank and brand that will shake up UK high street banking, operating in the interests of customers.
"I believe we have tabled a compelling proposition that will invigorate competition, provide jobs and is the right solution for taxpayers."
NBNK, which was set up by a consortium of investors to specialise in banking, added that it has remained in close contact with the City regulator since its initial bid and believes it is well placed to meet its requirements.
A spokesman for Lloyds said: "The group acknowledges receipt of a letter outlining an indicative revised proposal from NBNK.
"However, we continue to negotiate solely with the Co-operative Group and are continuing to prepare for a divestment through an initial public offering."
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