Macquarie Reportedly A Bidder For RBS Commodity Trading Unit

Post by Sharat on January 8, 2010 · Under Business News, Company News, International Business News, Mergers & Acquistions, banking · Comment

Australian investment banking major Macquarie Group is reportedly one of three interest bidders in the commodities trading joint venture of RBS.

RBS which is 84 per cent owned by the British government has been ordered by the European Union to sell its 51 per cent stake in the unit, known as RBS Sempra Commodities and in which RBS has a 51 per cent stake.

The remaining 49 per cent of the venture is owned by Sempra Energy and according to The Australian, RBS has received three bids for its stake in the joint venture valuing the company at US$ 4 billion.

The EU is forcing RBS to sell the venture as a condition for the lender receiving billions in state funding.

Boutique investment bank Lazard was hired by both RBS and Sempra to handle the sale.

The joint trading operation has performed extremely well over the last few years, and the concern is that a quick fire sale of the unit whilst the recovery in financial markets is still tentative, may not result in the kind of premium that the owners of the business are looking for.

RBS for its part says it is keen to move quickly to offload its stake which it says does not form part of its core business and is not essential to the lenders future.

Sempra which sold RBS its 51 per cent stake in the trading operation as recently as last year for US$1.7 billion is in no hurry and is not subject to regulatory requirements and therefore has additional leverage.

Sempra, which is based in San Diego has the right to veto any proposed sale of RBS’s stake in the venture under the terms of its agreement with its current partner. The energy company may also decide to buy its partners stake, at what is a relatively inexpensive price.

A spokesperson for Sempra declined to comment on the bids, which he termed as “speculation.” But did confirm that it was working with RBS on the sale of its stake in the joint venture.

“We understand RBS’ situation and we’re working co-operatively with them on this. But our primary focus is what’s best for our investors.” The spokesman said.

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