Sun Capital Partners in fray for 632 Lloyds bank branches

Sun Capital Partners, run by UK financier Hugh Osmond is planning to make a bid for 632 Lloyds bank branches, according to a report in The Sunday Telegraph.

Osmond is said to be raising a £2 billion from a number of investors who have backed his ambitious plan of acquiring the 632-branch banking business that has been put on the block by Lloyds Banking Group, the biggest mortgage lender in the UK.

Osmond, the founder of Pizza Express chain, has approached investors including Lansdowne Partners LP and Scottish Widows Group for funding the takeover, the paper said.

According to analysts, the price tag for the 632 Lloyds bank branches may be expected to be around £2 billion.  

The branches represent some 4.6 per cent of the current account market, which the EU wants sold in return for the £20 billion of taxpayer funds that went into propping up the bank during the 2008 banking crisis.

Meanwhile, the Independent Commission on Banking might ask Lloyds to sell off even more branches in its final report due this month. According to sources Lloyds was keen to prove it had potential offers for the branches by then in an effort to stave off demands for further sales.

The other bidders for Lloyds branches are NBNK, the shell vehicle set up by Lord Levene, a former Lloyd's of London chairman, and the mutually-owned Co-operative Bank.

According to sources, Lloyds was disappointed that National Australia Bank had made no offer after being among 10 potential bidders to ask for the details of the sale in mid-June.