Bloomberg News

NBNK Bids $2.4 Billion for 632 Lloyds Branches: Telegraph

March 25, 2012

Lloyds Banking Group (LLOY) said it remains in exclusive talks to sell 632 branches to Co-Operative Bank Plc after the Sunday Telegraph reported NBNK Investments Plc (NBNK) is still pursuing the assets.

Lloyds spokesman Ed Petter said Britain’s second-largest state-controlled lender is in “exclusive negotiations” with Co-Op, which remains the “preferred bidder” for the branches.

NBNK, created by former Lloyds of London Chairman Peter Levene to bid for financial businesses, will offer 1.5 billion pounds ($2.4 billion), the Sunday Telegraph said. That’s the same price as NBNK was said to offer before Co-Op was picked as the preferred bidder by Lloyds in December. Co-Op has offered 1.4 billion pounds, the newspaper said.

Olly Scott, a spokesman for NBNK, declined to comment by e- mail today. Lloyds is selling the branches to comply with European Union rules on state aid in the wake of its rescue by the British government following the 2008 financial crisis.

Lloyds delayed a detailed report on the sale last week and said it was preparing the branches for an initial public offering, fueling speculation Co-Op’s bid is struggling as regulators demand a full-time chief executive officer for the customer-owned lender’s banking arm. The Telegraph has previously reported that Co-Op had tried to hire NBNK’s chief executive, Gary Hoffman.

The Sunday Telegraph said NBNK’s bid proposes that Lloyds spin off the branches and list them on the stock market as a separate company, with shareholders in Lloyds being allowed to choose between accepting new shares or cash from NBNK. The newspaper didn’t say how it got the information.

To contact the reporters on this story: Gavin Finch in London at gfinch@bloomberg.net; Isaac Arnsdorf in London at iarnsdorf@bloomberg.net.

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net; Mike Harrison at mharrison5@bloomberg.net


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