Dexia SA (DEXB), the lender being broken up after a Franco-Belgian bailout, is close to selecting a final bidder for its asset management unit as New York Life Insurance Co. and Macquarie Group Ltd. (MQG) vie for the business, people with knowledge of the matter said.
GCS Capital (HK) Co., a private equity fund founded by Huan Guocang, is teaming with Beijing-based Hony Capital Ltd. to bid for the unit, said one of the people, who asked not to be identified as the process is private. The sale may fetch at least $500 million, two of the people said. An exclusive bidder may be selected within the next two weeks, one of them said.
Dexia said on June 27 that three international investors remain in competition for the unit, which has more than 79 billion euros ($96 billion) of assets under management and offers services in more than 25 countries, according to its website.
“There’s a general tendency to move toward lower-capital, fee-based models so that might explain the appeal for strategic buyers,” said Matthias de Wit, a Brussels-based analyst at Petercam SA. “Still, it’s a tricky market to sell any financial assets.”
ING Groep NV (INGA) and HSBC Holdings Plc (HSBA) are among other European financial companies selling assets as lenders beset by the region’s credit crisis and stricter capital rules seek to shed peripheral businesses. That’s giving North American and Asian rivals an opportunity to speed up expansion plans.
Huan set up Primus Financial Holdings Ltd. in 2009 together with Robert Morse, the former head of Citigroup Inc.’s investment-banking unit in Asia. Primus Financial led a $2.2 billion bid for American International Group Inc. (AIG)’s Taiwanese unit that failed in 2010 amid opposition from local regulators.
Macquarie in August 2009 bought Philadelphia-based Delaware Investments from Lincoln Financial Group for $428 million in cash to expand its asset management business. New York Life said in March it plans to eliminate about 200 jobs nationwide.
Hony Capital, sponsored by state-backed Legend Holdings Ltd., has raised $6.8 billion since it was founded in 2003. A purchase of Dexia’s asset management unit would be its first in the financial services industry outside China, data compiled by Bloomberg show.
Rabobank Groep, the Dutch lender preparing for tougher capital demands, said in April that it’s reviewing options for its asset-management unit, Robeco Groep NV. The Dutch cooperative bank, which is looking to bolster its credit rating, has sent out information memorandums to potential buyers for the unit, said two people familiar with the matter.
Non-binding bids were due last week and more than 10 potential buyers, including financial investors and asset managers, may make informal offers, one of the people said, who asked not to be identified because talks are private. While Rabobank would prefer to sell the business as a whole, it may be broken up because buyers could be interested in separate parts, the people said.
Robeco, which was founded in 1929 in Rotterdam, the Netherlands, had about 177 billion euros of assets under management at the end of last year. It employs more than 1,600 people in 14 countries, according to its website. The businesses include Harbor Capital Advisors in Chicago as well as a small telephone and internet banking unit.
Deutsche Bank AG (DBK), Germany’s biggest lender, in June failed to sell part of its asset management business after talks with Guggenheim Partners LLC fell through.
Officials at Dexia, New York Life, Macquarie, GCS and Rabobank declined to comment.