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Corsair Group Seen as Frontrunner to Buy 316 RBS Branches

A group headed by private-equity firms Corsair Capital LLC and Centerbridge Partners LP is in the lead to buy the 316 Royal Bank of Scotland Group Plc outlets, said a person with knowledge of the discussions.

RBS may choose a preferred bidder from the three offers on the table as soon as next week, said the person who asked not to be identified because they are not permitted to talk publicly. AnaCap Financial Partners LLP and Blackstone Group LP (BX), and a group led by W&G Investments (WGI) have also made offers.

RBS was ordered to sell its branches by 2014 to comply with European Union rules after receiving a 45.5 billion-pound ($73 billion) bailout in 2008 and 2009. Chief Executive Officer Stephen Hester, who steps down later this month, said in August that while the lender would prefer to sell the outlets in an initial public offering, it was open to private offers.

Corsair, based in New York, is looking to take a minority stake in RBS’s branch business after a public listing, two people with knowledge of the plan said. It would do so through an investment of 600 million pounds to 800 million pounds in a so-called pre-IPO convertible bond, the people said.

‘Constructive Discussions’

The group may see off competition from a joint bid from AnaCap and Blackstone, which was similarly structured. W&G Investments, backed by money managers including Schroders Plc (SDR), Threadneedle Asset Management Ltd. and Lansdowne Partners Ltd., tabled a bid of as much as 1.5 billion pounds to buy the business outright, the people said.

Officials at RBS and Corsair declined to comment. Andy Donald, a spokesman for W&G Investments, said the firm remains in “constructive discussions” with the Edinburgh-based bank. A spokesman for AnaCap wasn’t immediately able to comment.

The RBS branches have about 21.5 billion pounds in customer deposits and serve about 2 million small businesses and consumers. They generated 305 million pounds in operating profit in 2012, about 10 percent of the lender’s annual total.

After Spain’s Banco Santander SA (SAN) last year abandoned its 1.7 billion-pound planned purchase of the branches, RBS (RBS) signaled to the European Commission that it may seek an extension to the deadline, though it hasn’t formally asked for one yet.

The British Broadcasting Corp. reported Corsair is the frontrunner earlier today.

To contact the reporter on this story: Gavin Finch in London at gfinch@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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