Private equity excluded from RBS auction

Tweet
Facebook
LinkedIn
Google plus
Send to

Royal Bank of Scotland has sent the sales memorandum for its insurance businesses to trade bidders only and excluded all private equity houses from the auction process. According to press reports, interested financial investors were told they could not submit indicative offers due to the continuing difficulty in financing leveraged buy-outs.

The auction, to be run by Goldman Sachs and Merrill Lynch, was said to have shored up interest from a private equity consortium including Apax Partners and KKR, which joined Blackstone, Candover, Cinven, JC Flowers and TPG on the prospective private equity bidders list. A group of eight trade buyers have been invited to participate in the auction, consisting of Allianz, Zurich Financial, Assicurazioni Generali, Berkshire Hathaway, Allstate, Travelers, Ping An and American International Group.

RBS's insurance arm, which includes businesses such as Direct Line, Churchill, Privilege and Green Flag, is estimated to be worth between £6.5bn and £7.5bn. The Edinburgh-based bank is said to be open to a wide range of options including a packaged sale, a partial sale or even joint venturing the businesses. Indicative offers were due by the end of May.