Private equity firms were ruled out of the first round of bidding for RBS’ £7 billion (€8.8 billion; $13.6 billion) insurance assets, according to a source at a large buyout firm. The bank has only sent sales memoranda to targeted trade buyers.
Buyout firms have yet to succeed in a bid of this size in 2008. The largest buyout agreed so far is First Reserve’s take-private of CHC Helicopter for C$3.7 billion ($3.6 billion, €2.5 billion). The source said a deal the size of the RBS disposal was unlikely to be a realistic target for private equity firms.
TPG Capital had expressed an interest in the insurance assets, according to a source close to the buyout firm. Other interested bidders included Apax Partners, Kohlberg Kravis Roberts and The Blackstone Group, according to Financial Times, a UK newspaper.
RBS said it would be disposing of its insurance assets which include Direct Line and Churchill when it launched a £12 billion rights issue last month.
RBS declined to comment.