Royal Bank of Scotland suffered a setback in its plan to sell more than 300 branches after the most promising bidder pulled out of talks.
Santander submitted a formal offer last month to buy the consumer-focused bank, which has 314 branches, about £24.2 billion of assets and 2 million customers. Santander may return to the negotiating table if the Edinburgh-based lender is prepared to lower its asking price, said the people, who asked not to be identified because the details are private.
Ross McEwan, RBS chief executive, has struggled to dispose of its Williams & Glyn brand, an issue which has been costly for the lender, which has not paid shareholders a dividend since its £45.5 billion bailout during the financial crisis. RBS has explored various options to sell the business, which he’s described as the most complex technological challenge in banking.
Williams & Glyn will probably be sold for less than its £1.3 billion valuation, Ewen Stevenson, chief financial officer, said last month. Six years ago, Santander planned to buy the business but walked away in 2012, citing completion delays.
The business has attracted interest from several potential bidders, McEwan told reporters when the bank reported half-year earnings last month.
RBS also said last month it would halt plans to launch Williams & Glyn as a standalone bank, after it spent about £1.4 billion over seven years to prepare the unit for an initial public offering as an independent company. Scrapping that project will cost 200 million pounds more.
Clydesdale and Yorkshire Bank may be interested in buying Williams & Glyn, said one of the people. David Duffy, CYB’s chief executive, had said in an interview last week that the bank isn’t in any talks about acquisitions.
When asked whether CYBG was interested in Williams & Glyn, he said “people do a lot of speculating based on what might be viable rather than what’s actually happening.”
Nathan Bostock, Santander’s UK’s chief executive and a former finance director at RBS, has previously said his bank could consider British acquisitions with the approval of shareholders and regulators.
Britain is Santander’s biggest contributor to earnings among its global markets.
Bloomberg
