Macquarie Said Seeking to Trump Aberdeen's Bid for SWIP

Macquarie Group Ltd. (MQG) is trying to trump Aberdeen Asset Management Plc (ADN)’s offer for Lloyds Banking Group Plc’s (LLOY) fund management business with an all-cash bid, two people with knowledge of the talks said.

Macquarie, Australia’s largest investment bank, has offered about 600 million pounds ($959 million) for Scottish Widows Investment Partnership, said the people, who asked not to be identified because deliberations are private. The bid includes additional cash payments linked to an eight-year partnership with Lloyds, they said.

Aberdeen, based in the Scottish city of the same name, said in a statement last month it was in talks to buy SWIP in shares, followed by later payments in cash depending on how the operation performed. It didn’t put a valuation on its offer. The money manager said that it was also discussing a “strategic partnership” with Lloyds, without giving further details. A purchase by Aberdeen would make the Scottish firm Europe’s largest publicly traded money manager.

Lloyds, which is 33 percent owned by the U.K. government following its bailout, may choose its preferred bidder as early as this week before announcing a winner by the end of the month, two of the people said. No final decision has been made and the two bidders may improve their offers, they said.

Officials at Lloyds, Aberdeen and Macquarie declined to comment on the discussions. The Wall Street Journal last week reported Macquarie was planning to make an offer of about 500 million pounds.

Macquarie Chief Executive Officer Nicholas Moore is shifting from deal-making and trading to less volatile businesses such as lending and fund management.

Acquisition History

In July, Macquarie agreed to buy ING Groep NV (INGA)’s South Korean investment management business. In 2012, the firm considered purchasing asset management businesses being sold by Deutsche Bank AG and Dexia SA (DEXB), people familiar with the matter said at the time. In August 2009, the Sydney-based company acquired Philadelphia-based Delaware Investments from Lincoln Financial Group.

Macquarie this month reported a 39 percent increase in half-year net income, helped by the fund management business, which oversees about A$385 billion ($360 billion).

Lloyds CEO Antonio Horta-Osorio, 49, has been seeking to bolster the company’s balance sheet by selling assets, cutting costs and eliminating jobs following the bank’s government bailout in 2008. The London-based lender purchased Scottish Widows (SWIPRTA), which runs both a life-insurance business and the SWIP fund-management operation, for 7.3 billion pounds in 2000.

To contact the reporters on this story: Aaron Kirchfeld in London at akirchfeld@bloomberg.net; Ambereen Choudhury in London at achoudhury@bloomberg.net; Peter Woodifield in Edinburgh at pwoodifield@bloomberg.net

To contact the editor responsible for this story: Aaron Kirchfeld at akirchfeld@bloomberg.net

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