NAB poised to enter Ulster Bank bid battle

National Australia Bank (NAB), which owns National Irish Bank (NIB) and Northern Bank, may enter the bidding for Ulster Bank today. While the bank has refused to confirm or deny reports that it is preparing to launch a £2 billion sterling (€3.1 billion) bid for Ulster Bank, it is understood to be considering its position.

NAB managing director Mr Frank Cicutto said last week the group had up to £2 billion to spend on acquisitions in the northern hemisphere and was looking to make an acquisition, particularly in the UK, within the next six months. Ulster Bank is one of a number of acquisitions it could consider.

Ulster Bank would give NAB a significant presence in the Republic, although it may raise competitive issues in Northern Ireland where it is already one of the biggest players.

Several banks are expected to make indicative bids for Ulster Bank. Irish Life & Permanent and Bank of Ireland are expected to make a joint bid to NatWest, while several British financial institutions are understood to be evaluating the bank.

A number of European banks have expressed an interest in Ulster Bank but the Dutch bank ABN-Amro and the Belgian KBC bank, which owns Irish Intercontinental Bank, have both ruled themselves out of the bidding.

An ABN-Amro spokesman said Ulster Bank would not conform with its long-term strategy here. And, while KBC has stated it will not be making a bid for Ulster today, industry sources suggest the bank may yet be interested in acquiring part of Ulster Bank if it were to be broken up eventually.

Indicative bids have been invited by close of business today, although NatWest's advisers are likely to accept bids after that deadline.

Its advisers, Dresdner Klein wort Benson, are charged with raising the maximum value for NatWest shareholders in the sale. To achieve this objective, Ulster Bank may be sold in its entirety to a bidder or consortium of bidders, or it may be carved up into separate units and sold off to the highest bidder.

Dresdner Kleinwort Benson is also considering floating the company on the Dublin and London markets if the bidding process fails to attract a sufficiently high price for Ulster Bank.