By Amy-Jo Crowley and Emma-Victoria Farr
LONDON/FRANKFURT (Reuters) – Barclays has received non-binding offers from private equity firms including Warburg Pincus and Centerbridge to buy its German consumer finance subsidiary, three people familiar with the matter told Reuters.
Bidders are waiting to be informed on whether they are through to the second phase of bidding for the unit, formally called Barclaycard Germany, which has a price tag of around 500 million euros ($547 million), the first two sources said, speaking on condition of anonymity.
Pollen Street and several banks based in Germany and elsewhere in Europe showed interest in a bid ahead of the initial deadline on July 21, the two people added, though it remains unclear if they are still in the running.
Barclays, Warburg Pincus, Centerbridge and Pollen Street declined to comment.
A move to sell the German unit is part of a wider strategic review of Barclays’ payments activities, a fourth person familiar with the matter said.
The bank has engaged a global consultancy to analyse whether some of its payments businesses should be expanded, sold separately or combined with other providers, according to a Reuters report in June. Only bidders with a banking licence can bid for the asset, meaning private equity houses are likely to bid via a banking firm within their portfolio, all the sources said.
Warburg Pincus is understood to be bidding via its Belgian Bank Aion, which it bought in 2018, the first source said, adding a deal would expand its loan book outside of Belgium.
Centerbridge is bidding via its German credit marketplace Auxmoney, which it bought in 2020, according to the second person.
An acquisition of the German unit would expand Auxmoney’s presence into the credit card space, adjacent to consumer lending, this person added.
The Hamburg-based Barclays unit, which has about two million clients and 700 employees, reported a loan book, or assets, of 4 billion pounds ($5.1 billion) at the end of June. It offers credit cards as well as loans for low-priced goods.
($1 = 0.9146 euros)
($1 = 0.7871 pounds)
(Reporting by Amy-Jo Crowley, Emma-Victoria Farr, additional reporting by Pablo Mayo Cerqueiro, editing by Elisa Martinuzzi and Mark Potter)
Private equity refers to investment funds that buy and restructure companies not listed on public exchanges. These funds typically invest in private companies or public companies with the intention of taking them private.
Consumer finance involves financial services and products that cater to individual consumers, such as personal loans, credit cards, and mortgages, enabling them to manage their personal finances.
A bidding process is a competitive procedure where multiple parties submit proposals or offers to win a contract or purchase an asset, often involving negotiations and evaluations.
A loan book is a financial institution's record of all the loans it has issued to borrowers, detailing the amounts, terms, and repayment schedules.
A banking license is a legal authorization granted by a regulatory authority that allows a financial institution to operate as a bank and provide banking services.
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