Co-operative Bank says received several bids in sale process
LONDON – Britain’s Co-operative Bank said on Friday it had received a number of non-binding offers that would go into a next phase of bidding, as the struggling lender seeks a takeover that would ward off the need for state intervention.
The bank, which put itself up for sale in February, said all the offers involved some form of liability management, as the bank mulls ways to reduce its debt and raise capital back to levels that would satisfy regulators.
The bank said it was in parallel discussions with investors on other ways to build up its capital.
Co-operative Group, which owns a fifth of Co-op Bank, on Thursday wrote down the value of that stake to nil, in a sign of uncertainty about the outcome of the sale process and the consequent difficulty of valuing the lender.
Sources close to the sale have previously told Reuters that most bidders were interested in specific assets only as they saw little value in buying the whole group.
The lender, which has four million customers, urgently needs to raise capital to avoid the risk of being wound down. On Feb. 13 it announced plans to find a new owner after it struggled to meet regulatory capital requirements.
If the bank fails to attract an outright buyer, or enough fresh capital from outside investors, it faces the possibility of becoming the first lender to undergo the wind-up process under powers granted to the Bank of England.
The rules drawn up following the 2008 financial crisis grant the Bank’s Prudential Regulation Authority to intervene in a struggling bank, with the aim of imposing losses on its investors rather than taxpayers via a bailout. -Reuters