Friday 22 November 2019

US tycoon Wilbur Ross targets more European bank deals

Steve Slater and Laura Noonan

BILLIONAIRE US investor Wilbur Ross is targeting more deals in Europe's financial services industry after buying into a listed company that failed to make its own inroads into the sector.

Ross, founder of private equity firm WL Ross, already owns half of Britain's Virgin Money and a 9pc stake in Bank of Ireland. He said today he saw no shortage of opportunities for more deals in Europe.

He is paying about £8m to buy up to 37.8pc of NBNK to use as an acquisition vehicle.

NBNK was set up two years ago, but said in June it would wind up after failing to buy a trio of assets, including a network of 632 branches sold by Lloyds Banking Group.

"Given the turmoil in financial services very few companies can get access to public capital markets so we feel a company like NBNK that is listed and has supportive shareholders will be attractive for a number of companies," Ross said.

He said he would "cast the net wide" and did not have a specific deal in mind, but added: "Judging from the amount of inbound calls we have received already, I do not believe there will be a shortage of opportunities."

Ross, 75, launched his private equity firm in 2000 and invests in and restructures financially distressed companies, notably in the financial services, transport, energy, healthcare industries.

NBNK, which said in September it had received enquiries about continuing the company, said today that Ross planned, in consultation with other shareholders, "to review its (NBNK's) investment policy including investment in continental Europe."

Ross said it did not make sense to narrow options down to specific countries or areas at this stage.

"We're confident we can find some interesting investments. We are serious about it, but it's hard to forecast in advance what it will accomplish," he said.

Ross added that he would pump in more cash and was confident NBNK's existing investors would be prepared to stump up money for the right deals.

"There's cash looking to be put to work and that's what makes it (NBNK) a unique vehicle," he said.

NBNK said it would issue up to 1.3 million shares to Ross at 39 pence apiece in a deal structured as a tender offer, so existing shareholders can sell their shares.

Once the deal takes effect, Ross will become chairman. Current chairman Peter Levene and chief executive Gary Hoffman will step down.

NBNK had failed to buy the Lloyds branches despite having offered substantially more than successful buyer, the Co-Operative. Lloyds said the Co-Op offered greater certainty to customers and employees and had a better chance of success.

NBNK had also tried to buy bailed out bank Northern Rock and UK branches from National Australia Bank.

Ross has pumped several hundred million pounds into Virgin Money, which took over part of Northern Rock, aiming to create a challenge to Britain's big banks.

His Virgin Money and proposed NBNK investments were separate, a spokesman for Virgin said.


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