Santander UK is intensifying its plans to bid for more than 300 Royal Bank of Scotland (RBS) in a reprise of a deal it walked away from more than three years ago. Sky News has learnt that the Spanish-owned lender has appointed investment bankers at UBS to advise on an offer for Williams & Glyn (W&G;), for which the taxpayer-backed RBS said last month it would consider takeover proposals. The appointment of UBS is intriguing because the Swiss bank advised RBS on an auction of W&G; when Santander UK was previously in exclusive talks to buy the business. That deal collapsed in 2012 after Santander UK became frustrated with ongoing IT issues relating to the separation of the branch network. A formal auction of W&G; will begin in the next few months as RBS seeks to secure an exit from the business ahead of an extended deadline set by the European Commission. While the business is being referred to by RBS as W&G;, it will not be formally rebranded in that way unless the business does launch as a standalone entity. Santander UK and Virgin Money were two of the parties indirectly referred to in a statement issued by RBS in December which referred to "a number of informal approaches" for W&G.; The auction will run alongside preparations for floating what would be Britain's seventh-largest bank on the London Stock Exchange. It could be valued at as much as £2bn, according to some analysts. A separate deal struck in 2013 with a consortium of investors, including the Church of England's pension fund, would see it hold a large equity stake in W&G; if it goes public. The new bank, which has to be divested by RBS by the end of 2017 under an agreement between the Government and Brussels, has 1.8 million customers, including a significant presence in the small business banking market. At the end of September, W&G; had net loans and advances to customers of £20bn and customer deposits of £24bn. A formal offer from Santander UK would represent a stunning turnaround for the Spanish bank, which pulled out of exclusive talks to buy W&G; in the autumn of 2012. Ana Botin, Santander's group chairman and the architect of its decisions to pursue and abandon the bid three years ago, recently told investors that she would examine acquisition opportunities in its core markets - of which the UK is one. For Virgin Money, a takeover of W&G; would have strong strategic merit as it seeks to grow its presence in the SME banking sector. However, with a market value of just under £1.7bn, Virgin Money would almost certainly have to raise equity from the sale of new shares in order to execute a deal. Sources said that Banco Sabadell, the Spanish lender which bought TSB last year, was also expected to look at W&G; despite remarks by a senior executive that it would not look at further takeovers "for the next year". One person pointed out that the timetable for W&G; to be spun out of RBS, with separation not taking place until the first quarter of 2017, did not conflict with the Sabadell executive's comments. In its statement, RBS said it had "made significant progress in separating Williams & Glyn" and that it remained "committed to meeting our obligation under the State Aid agreement to dispose of Williams & Glyn before the end of 2017" The bank said it would target "the signing of a binding agreement to sell the business by year end 2016". Santander UK and UBS declined to comment.
Santander UK has hired advisers to help it make a fresh bid for Royal Bank of Scotland 's ( RBS ) Williams & Gray ( W&G ) branch network , according to reports . A previous deal between Santander and BT collapsed in 2012 due to concerns by shareholders over IT issues relating to the separation of the branch network . A formal auction of W&G will begin in the next few months , as RBS looks to secure an exit from the business ahead of an extended deadline set by the European Commission . Sources say that Banco Sabadell is also interested in buying , despite remarks from its senior executive last week that it was not looking at further takeovers " for the next year " .