Levene Challenges Lloyds CEO Over Value of NBNK’s Branches BidGavin Finch
NBNK Investments Plc founder Peter Levene said his firm’s offer for 632 Lloyds Banking Group Plc branches exceeded Co-Operative Bank Plc’s bid, disputing evidence the lender’s chief executive officer gave to lawmakers.
Lloyds CEO Antonio Horta Osorio was wrong to say Co-Operative offered more than NBNK and that was why its bid was chosen, Levene said in a letter to lawmakers published today. NBNK’s offer would have been at the top of a 630 million-pound ($950 million) to 730 million-pound range it had set out, Levene said. Horta Osorio told lawmakers that Co-Operative bid 700 million pounds compared and NBNK 630 million pounds.
“By selective use of component parts of NBNK’s very detailed bids, an impression was created that the Co-Operative’s bid was higher than NBNK’s in cash terms,” Levene said. “It is a strain to reach that conclusion, even when looking at the bottom end of the range that NBNK would have paid and a definite falsity when viewed against the top of the range.”
Lloyds, which is 39 percent owned by the government after receiving a bailout during the financial crisis, is preparing to sell the outlets in an initial public offering next year. The London-based lender has denied it came under political pressure to sell the branches to Co-Operative Bank, a customer-owned lender. NBNK was an acquisition vehicle Levene, a former Lloyd’s of London Chairman, started in 2011 to buy assets from struggling banks.
“We would have been perfectly happy for NBNK to have won this particular transaction,” Lloyds Chairman Win Bischoff, 72, told lawmakers on June 18. “There was no political pressure. We looked at it purely from the point of view of execution and price.”
Co-Operative Bank dropped its bid for the branches in April after regulators expressed concern that its managers didn’t have enough banking experience to run the enlarged business and the firm lacked capital. Co-Operative Bank said last month it had a 1.5 billion-pound capital shortfall.
“We have nothing to add to the evidence at the Treasury Select Committee,” Lloyds spokesman Ed Petter said. “The decision was based purely on commercial terms.”