By Gillian Tan
SYDNEY--Westpac Banking Corp. (WBC.AU) is the frontrunner to
acquire the main Australian businesses of U.K. lender Lloyds
Banking Group PLC (LLOY.LN), with a deal likely to be announced by
the end of the week, according to people familiar with the
matter.
Australia's second-largest bank by market value bid around 1.5
billion Australian dollars (US$1.4 billion) for Lloyds's asset
finance and commercial lending units, though it could end up paying
less if the U.K. bank chooses to retain some assets within Lloyds
International Pty. Ltd., the holding company of the units, one of
the people said.
An agreed deal would mark Westpac's largest acquisition since it
paid more than A$18 billion for St George Bank Ltd. in 2008. It
would also result in the Sydney-based bank obtaining a more-than
40% share of the Australian leasing finance market and attract
scrutiny from the Australian Competition and Consumer
Commission.
"If a transaction is announced, the ACCC will be likely to
conduct a public review, and details will be posted on our
website," a spokeswoman for Australia's competition regulator said
in an email.
The other two parties to make final bids for the units, which
have assets under management of close to A$9 billion, were
Macquarie Group Ltd. (MQG.AU) and a consortium comprising non-bank
lender Pepper Australia Pty Ltd. and Bank of America Merrill Lynch,
people familiar with the situation said.
The Wall Street Journal reported two weeks ago that another
shortlisted buyer, ANZ Banking Group (ANZ.AU), withdrew before
final bids were due on Sept. 30.
The effective exit of Lloyds from the Australian market comes as
the U.K. government begins returning its bailed-out banks to
private hands. Last month, it reduced its stake in Lloyds to 33% by
selling a 6% interest that generated 3.21 billion British pounds
for the U.K. Treasury.
By disposing the units, Lloyds will be left with a minor
presence in the Australian market, where it will provide services
such as interest-rate swaps and foreign-exchange hedging to
clients. It follows a series of other divestments by the lender,
which is taking steps to meet the U.K. government's orders to pare
back assets to boost capital buffers.
Spokespeople for Lloyds, Westpac, Macquarie and Pepper declined
to comment.
Write to Gillian Tan at gillian.tan@wsj.com
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