Santander and Virgin suggested for £2bn Williams & Glyn move

Williams_&_Glyn'sSantander UK and Virgin Money are preparing to bid for Williams & Glyn, the bank due to be spun out of Royal Bank of Scotland.

Analysts and industry sources suggested Santander and Virgin are those most likely to be interested, although also mentioned wereh Glasgow-based Clydesdale Bank, along with Spanish groups Sabadell and BBVA.

While Sabadell, which moved into the UK through the acquisition of TSB, stated it had no interest in buying Williams & Glyn, Virgin and Santander said they continued to monitor potential acquisitions but did not specifically mention Williams & Glyn.

Clydesdale chief executive David Duffy, meanwhile, said this week that his focus is on that bank’s imminent flotation and growth rather than looking at consolidation.

A statement issued by still 73 per cent state-owned Royal Bank of Scotland yesterday referred to a “number of informal approaches” for its Williams & Glyn business.

The new bank – which will have more than 300 branches – has to be sold by RBS by the end of 2017 under an agreement between the Government and the EU.

W&G will have 1.8 million customers, net loans and advances worth £20bn and customers deposits of £24bn.

RBS is planning to auction W&G next year prior to a float. It is thought the new lender will be valued at around £2bn.

Santander UK pulled out of exclusive talks to buy W&G as recently as 2012.

Santander and Virgin declined to comment.

RBS chief executive Ross McEwan said: “Separating out the Williams & Glyn business is a complex process, but we remain focused on meeting our state aid obligation, achieving full divestment by the end of 2017, and reaching the best outcome for shareholders, customers and staff.”

In September 2013 a consortium subscribed to a £600m bond which could be exchanged for an equity stake of up to 49 per cent if Williams & Glyn came to the stock market.

The group included private equity firms Corsair and Centerbridge, along with the Church of England Commissioners and Rothschild vehicle RIT Capital Partners.

It is not known what will happen to that bond if Williams & Glyn does not go through an initial public offering.

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