Corsair-led consortium buys RBS branches

Alice Murray
30 September 2013

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A consortium of financial buyers comprising Corsair Capital, Centerbridge Capital, RIT Capital Partners and the Church Commissioners has bought up 314 RBS branches for ТЃ600m.

The group of buyers plans to turn the branches into a stand-alone public company, aiming for a 2015 listing. The branches will be renamed Williams & Glyn. The transaction ensures the new investors will act as cornerstone investors when the company lists. The consortium beat competition from Blackstone and AnaCap.

The £600m investment comes from a bond issued by RBS, to be subscribed by the investors. The bond will be exchangeable for a significant minority interest in Williams & Glyn at the time of its IPO. The bond purchase will be supported by £270m of vendor debt, with the investors providing the remainder in cash.

The transaction also includes a further payment of up to £200m depending on the company's share price 18 months after its planned IPO.

The deal is the result of the European Commission's condition of its state bailout in 2008, which saw RBS become 81% owned by the state.

Company
The deal sees the creation of new bank Williams and Glyn, comprising 314 high street branches based predominantly in the north-west of England. The business will be run alongside RBS while it develops its own technology platform, separates accounts and completes the rebranding.

People
The new company will be run by CEO John Maltby, previously commercial banking chief of Lloyds, and Philip Green, previously CEO of United Utilities. Corsair vice chairman Lord Davies will join as non-executive director.