Lloyds ends exclusivity talks with Co-op

LLOYDS Banking Group has reopened talks with the Co-operative Group’s main competitor for its Project Verde assets.

The Co-operative Group was named as preferred bidder for the Project Verde assets back in December, but its talks have subsequently hit regulatory trouble. The assets being sold by Lloyds include 632 branches and a large loan portfolio, which the bank is being forced to sell off to meet state aid rules linked to the bail-out of Bank of Scotland in 2008.

Rival bidder NBNK Investments announced earlier this month that it had launched a new bid for the assets, which would allow Lloyds stakeholders to take cash or shares in a new, standalone bank.

Lloyds Banking Group said today that it “continues to have productive and meaningful discussions with the Co-operative Group”, which remains its preferred bidder.

“However, LBG is no longer holding these discussions under an exclusivity agreement.

“Given the renewed interest in the Verde business shown by NBNK, LBG will now consider detailed discussions with other parties but only once LBG is satisfied that any proposal is likely to achieve the appropriate regulatory clearances and offers greater value and/or certainty to shareholders against its alternative option of an Initial Public Offering,” it said.

It added is continuing to progress work on floating off the assets as a standalone bank itself, and would provide an update on the sale process by the end of the second quarter.

A spokeswoman for the Co-operative Group said that it “remains very involved in the process currently being run for the sale of the Lloyds Banking Group branch assets.

“As Lloyds’ preferred bidder, talks are on-going and we continue to make good progress,” she added.