Saunders given £3bn war chest

Robin Saunders, the star financier at the German bank WestLB, has been given a war chest of £3bn to hunt for fresh deals. The American banker, who is currently stalking AWG, the Anglian Water company, has already backed Philip Green's takeover of Bhs and launched the "Bernie Bond" fund-raising on behalf of Formula One supremo Bernie Ecclestone.

Ms Saunders believes the funds will enable WestLB to retain the equity it takes and take longer-term positions. However the deals of Ms Saunders' principal finance unit still have to be approved by the WestLB board.

Ms Saunders approach has been modelled on the securitisation of assets pioneered by Guy Hands at the Japanese bank Nomura International. This involves buying assets then paying down debt by raising bonds against the cash-flow of the acquired company. Ms Saunders is said to have been surprised that more banks did not follow Nomura's lead.

West LB was also involved in Mr Green's aborted bid interest in Marks & Spencer three year ago. It is supporting Mr Green's participation in the £3bn bid battle for Safeway.

This week Ms Saunders is due to renew her assault on AWG after her original 510p-a-share offer was rejected by the beleaguered group's management. The WestLB board is due to meet tomorrow to discuss the bank's interest in AWG.

It is thought it will need to improve its indicative terms considerably to secure the backing of the AWG board though WestLB has not ruled out going hostile. The current offer values AWG at £900m.

AWG's bid vehicle Bream Investments has on board Gordon Morrison, the brother of Sir Fraser Morrison, who both sold their Morrison Construction business to AWG in 2000. Sir Fraser is also interested in buying parts of AWG.