WestLB to build buyout business

The German bank has reportedly agreed to provide its principal finance chief Robin Saunders with £3bn to invest in the European buyout market.

German bank WestLB looks set to become one of Europe’s largest private equity investors following its decision to allocate £3bn (E4.5bn) to European buyout opportunities.


According to a report in the Sunday Times newspaper, WestLB chairman Jürgen Sengera agreed in late 2002 to provide Robin Saunders, head of the bank’s principal finance unit, with a large amount of buyout capital following lengthy negotiations about Saunders’ future within the group.


In November, it was reported that Saunders was planning to launch an independent private equity unit, raising a buyout fund that WestLB would possibly invest in.


According to the Sunday Times, deals undertaken by Saunders and the team of 25 professionals at the bank’s principal finance unit will be subject to approval by Johannes Ringel, a WestLB board director, as well as the rest of the bank’s board. The bank has also asked Saunders to split its principal-finance and securitisation team into two units, said the newspaper.


The unit has already explored a number of opportunities in Europe, including the Cinven-owned cinema chain Odeon, which is valued at around £450m, and UK utility group AWG. Saunders’ £900m verbal offer has been rejected by senior board members at AWG, although Saunders has not ruled out the possibility of launching a hostile takeover for the business.


Today WestLB declined to comment on its plans for the principal buyout unit.