US tycoon Ross backs Branson’s bid for RBS arm
06 Apr 2010
American billionaire Wilbur Ross has evinced interest in pumping in another £500 million ($760 million) into Sir Richard Branson's Virgin Money soon after picking up a £100 million, 21 per cent stake in the company over the week end.
Market observers say fresh capital infusion from Ross will enable Virgin Money to bid for 318 branches of the Royal Bank of Scotland (RBS). The cost of RBS's branch network could be as high as £2 billion.
Branson is expected to make a formal announcement on his teaming up with Ross today.
RBS was bailed out by the UK government by injecting billions of pounds of taxpayers' money during the financial crisis.
However, the European Union antitrust regulators have ordered the bank to divest a string of assets, including its high street chain and insurance arm, to comply with the European Commission's state aid rules (See: RBS to sell Williams & Glyn's to quell EU competition concerns).
Other possible bidders for the branches include Spanish bank Santander, another Spanish bank, BBVA, and National Australia Bank (NAB), the owner of the Clydesdale and Yorkshire Banks in Britain (See: Santander leads race for RBS' Williams & Glyn's brand).