Reuters: Deals: NBNK eyes bid for Lloyds branches if Co-Op deal fails

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NBNK eyes bid for Lloyds branches if Co-Op deal fails Mar 25th 2012, 13:47 LONDON | Sun Mar 25, 2012 9:47am EDT LONDON (Reuters) - British banking venture NBNK (NBNK.L) is waiting on the sidelines to see if it can make a fresh approach to Lloyds (LLOY.L) should Lloyds' planned sale of 632 bank branches to The Co-Operative Group fail, two sources close to the matter said. "They remain keen to offer something to Lloyds should the Co-Op deal fall apart," one of the sources said on Sunday. The sources could not confirm or deny a report in The Sunday Telegraph newspaper that NBNK was planning a fresh 1.5 billion pound ($2.4 billion) offer for the 632 branches which Lloyds has been forced to sell by European regulators. Last year, NBNK lost out to Co-Op - a mutually-owned conglomerate whose businesses include a supermarket chain and a financial services arm - in the battle to become Lloyds' preferred acquirer of the branches. Lloyds has been in exclusive talks with Co-Op over the sale, but both companies admitted last week the deal was proving to be complicated, signaling a deal may take longer than planned and could even fall apart. Lloyds, 40 percent owned by the British government after a state bailout during the 2008 credit crisis, also reiterated it was still keeping open the option of spinning off the 632 branches and listing them on the stock market. In December, credit ratings agency Standard & Poor's cut its outlook on Co-Op due to the risks associated with the Lloyds deal. Other analysts have said Co-Op may need to raise money through a debt issue to fund the acquisition, estimated to be worth some 1 billion pounds. Analysts are expected to seek more details on how the deal - which has been codenamed "Project Verde" - is progressing when the Co-Op reports its annual results on March 29. The sale of Lloyds' Verde assets would create Britain's seventh-biggest bank, with the assets representing 4.6 percent of personal current or checking accounts and 5 percent of the mortgage market. European regulators ordered Lloyds to sell the assets as payback for its 2008 state bailout, and Lloyds has said it is on track to complete a transfer of the bank branches before the end of 2013. NBNK was set up in 2010 to acquire British banking assets, and the company has also been linked with NAB UK (NAB.AX), with sources having told Reuters that the Australian bank is likely to position its UK bank assets for sale. ($1 = 0.6304 British pounds) (Reporting by Sudip Kar-Gupta; Editing by Mark Potter) Link this Share this Digg this Email Reprints

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