The boss of W&G Investments, the former Tesco finance director Andrew Higginson, today claimed that his investment vehicle was the “only serious bidder” for the 315 branches that Royal Bank of Scotland has been forced to put up for sale.
W&G plans to offer RBS £1.1 billion upfront and a further £400 million out of future profits for the branches.
“Having been a division within RBS with a ‘for sale’ sign above it for five years, inevitably it’s been slightly neglected,” said Higginson.
“The staff have done a fantastic job in holding the customers, but you know this business needs separate focus — the management vigour that a for sale sign doesn’t allow you to have.”
W&G shares were suspended immediately on joining AIM today, with plans to start trading only if and when a deal is struck with RBS. The placing on AIM raised £15 million from more than a dozen institutional investors and will be used to cover the costs of preparing the bid, including the £2,500-a-day fees for chief executive Shaun Doherty.
Higginson said: “We are the only actual bidder. The others involve an initial public offering two years down the track, whereas ours is a proper bid that will buy the business outright this year.”
But the two rival bidding consortiums, both led by private equity firms, claim their offers would ensure that RBS and its largest shareholder, the taxpayer, collect the upside on any valuation when the spun-off branches are floated in a couple of years. John Maltby, the former Lloyds executive who is heading the rival Corsair consortium, which includes the Church Commissioners, said: “The W&G approach is highly conditional, has yet to raise all the money and has not completed its due diligence. We have put our money on the table and are not trying to buy this bank on the cheap.”
His consortium is offering between £600 million and £800 million, which would become a stake of slightly less than 50% when the business floats. The third bidder — the UK private equity firm AnaCap, with backing from Blackstone — has given few details of its proposal although it also said it would help RBS “maximise value”.
It is expected that RBS will choose which offer to grant exclusivity early next month, with a deal likely to take place early in 2014. The 315 branches, which all bidders plan to run under the original Williams & Glyn’s name, have assets of £20.5 billion, and 2 million retail and 250,000 small business customers.