NBNK Investments Plc, the investment company founded by Lloyd’s of London Chairman Peter Levene, is in talks to acquire National Australia Bank Ltd.’s U.K. units, according to a person familiar with the talks. Trading in NBNK shares was suspended.
London-based NBNK wants to acquire Clydesdale and Yorkshire banks as a first step to bidding for more than 630 branches from Lloyds Banking Group Plc, said the person, who declined to be identified because the discussions are private. The talks are in an early stage and may not succeed, the person said.
NBNK raised 50 million pounds ($80 million) in August 2010 to make acquisitions and form a “substantial” consumer bank with a 4 to 6 percent share of the British banking market. National Australia has more than 300 retail branches in the U.K. with about 2.7 million customers at Clydesdale and Yorkshire banks, according to its website.
NBNK’s shares will be suspended on London’s Alternative Investment Market until documents relating to acquisition talks are published, NBNK said in a statement yesterday. It did not name the company it was talking to.
The potential acquisition would be a so-called reverse takeover, the company said in the statement. “There can be no certainty that a transaction will be forthcoming.”
Lloyds gained 0.3 percent to 30.75 pence at the close in London, making it the second-best performer in the five-member FTSE 350 Banks Index.
Melbourne-based National Australia, the best performing stock among the nation’s so-called four-pillar lenders, said last month when it reported earnings for the quarter ended June 30 that its U.K. banking businesses “coped well with the slow credit environment.”
The ratio of late and impaired loans in the U.K. dropped to 3.27 percent at June 30 from 3.44 percent at March 31, the bank said.
An NBNK spokesman declined to comment beyond the statement. National Australia referred to comments previously made by Cameron Clyne, the bank’s chief executive officer.
“It is also only natural that we would look at other options” for its U.K. units, he said. “This would however, be against strict financial criteria with our key focus to generate value for our shareholders.” The Financial Times reported the story earlier.