Wellcome, Blackstone withdraw RBS bid

A bid by UK charitable foundation The Wellcome Trust and The Blackstone Group to buy 318 branches owned and operated by UK bank The Royal Bank of Scotland, has been withdrawn.

The Wellcome Trust and The Blackstone Group’s bid to buy 318 branches of UK bank The Royal Bank of Scotland has been withdrawn, according to a report by UK daily newspaper, The Daily Telegraph.

The bid by the UK charitable foundation and the private equity and real estate giant, which was made at the beginning of the month, was reported to have been “not competitive”.

The partners were the only private equity-based bidders left in the bidding process, leaving European banks BBVA, Santander, Virgin Money and National Australia Bank to battle it out for the portfolio. Bidders are said to have bid between £1 billion (€1.15 billion; $1.55 billion) and £2 billion for the assets.

The winning bidder would take on 318 branches and the operating business of Williams & Glyn, which is owned by RBS.

The sell-off by RBS will help the bank comply with European Union regulations following its bailout by the UK government in 2008. The Blackstone/Wellcome bid came after weeks of speculation surrounding Blackstone’s intentions for the UK banking market after it emerged that the firm had applied to the Financial Services Authority for a UK banking license.

It would have been the second time that Blackstone and Wellcome have teamed up to acquire a retail banking platform. In May 2009, the two institutions were part of a larger consortium – including private equity firms The Carlyle Group, Centerbridge Partners and WL Ross – to back a $900 million buyout of failed Floridian bank BankUnited.

Wellcome, which is one of Europe’s most influential private equity LPs, has expressed a desire to execute more direct co-investments as part of its private equity investment programme.