NAB rejects £2bn takeover offer for Yorkshire and Clydesdale

Private investment firm Sun Capital, run by turnaround specialist Hugh Osmond, was in early stage talks for both banks.

A spokesman for Yorkshire Bank’s parent company National Australia Bank declined to comment on the rumours, but it is understood that the bid was deemed too low.

Sun Capital is also bidding for the 632 Lloyds bank branches that have been put up for sale to appease the European Commission.

NAB recently dampened speculation it will sell its UK assets.

Mark Joiner, NAB’s executive director for finance, said there is no need for a “fire sale” of Yorkshire and Clydesdale.

“The UK business does not lose money,” he said. “The market is at the bottom and so is the pound. It is a rotten time to sell. There will be no fire sale.”

He added NAB’s preferred strategy is, for the time being, to hold on to its portfolio of 187 Yorkshire Bank branches, 152 Clydesdales and 73 business and private banking centres. “We would prefer to own the asset, raise the returns and exit a few years later, or IPO it. There are options,” he said.

NAB has also given up on buying the Lloyds branches, leaving Sun Capital, the Co-op and NBNK to bid for them.

“The fact that they (Lloyds) sweeten the deal does not change anything for us,” said Mr Joiner.

Lloyds, which is 41 per cent state-owned, was ordered to sell the branches by the European Commission to appease competition concerns following its acquisition of Halifax Bank of Scot- land.

NBNK recently held talks with NAB over the acquisition of the Yorkshire and Clydesdale banks.

Both Sun Capital and NBNK were keen to buy Yorkshire and Clydesdale to give them a branch network ahead of the purchase of the 632 Lloyds branches

NAB has been under constant pressure to either sell or beef up its UK operations.

NBNK is reported to have spoken to NAB about acquiring Yorkshire and Clydesdale via a reverse takeover.

Mr Osmond, best known for high profile investments in Pizza Express and Punch Taverns, is understood to have plans to raise some £2bn to buy the Lloyds branches.

Sun Capital aims to create a new banking presence on the British high street to compete with the big players in the wake of the credit crunch.

Sun Capital declined to comment last night.