Former Standard Chartered Plc Chairman Mervyn Davies is working to assemble an investor group to bid for part of the U.K. government’s stake in Lloyds Banking Group Plc (LLOY), according to a person with knowledge of the talks.
Davies, who has been working with Corsair Capital LLC, a New York-based private-equity firm, has approached Standard Life Plc (SL/) as well as sovereign wealth funds about making an offer for some of the government’s 39 percent holding, said the person, who asked not to be identified because the talks are private. The group hasn’t reached an agreement with the Treasury, which is weighing other ways to dispose of the stake, including by a sale to money managers, the person added.
U.K. Financial Investments Ltd., the body that oversees the government’s stakes in Lloyds and Royal Bank of Scotland Group Plc, last month invited banks to apply to manage the sale of the holdings. Firms have until tomorrow to submit their offers and be considered for the offerings.
Lloyds shares exceed the level at which the government says it will break even on its holding after providing a 20 billion-pound ($30 billion) rescue to the London-based lender almost five years ago. The stock closed at 64.63 pence in London on July 5, above the 61 pence at which the government has said it expects to break even on the investment. The lender has a market value of 46.2 billion pounds.
Davies’s group may try to buy at least 10 percent of the lender and is prepared to offer more than the government’s 61-pence break-even price, one of the people said.
Lloyds spokeswoman Shella Ali declined to comment on the discussions as did officials at Corsair Capital, a U.S. private equity that targets the financial services industry, Standard Life Investments, UKFI and the Treasury. Sky News first reported Davies’s talks.
Chancellor of the Exchequer George Osborne said last month the U.K. government is “actively considering” selling shares in Lloyds. RBS’s return to private ownership is still some way off because it’s weighed down by too many poor assets, he told financiers at a speech at London’s Mansion House on June 19.
Davies, 60, was Britain’s trade minister under the last Labour government. From 2006 to 2009 he was chairman of Standard Chartered, the London-based lender which makes more than three-quarters of its earnings in Asia. He joined Corsair as vice chairman and a partner in 2010.