NatWest Group is to undertake a £2.5bn acquisition of wealth management group Evelyn Partners in what would be its biggest corporate acquisition since the taxpayer bailout in 2008.
Sky News has learnt that NatWest,
which returned to full private ownership last year, is in advanced talks to acquire Evelyn from its private equity backers this weekend.
Barclays, a rival bidder, is believed to have challenged NatWest in recent days after submitting a fresh round of offers last week.
City sources said NatWest was expected to pay between £2.5 billion and £3 billion to buy Evelyn, which provides a wide range of wealth management services to thousands of clients.
An announcement confirming the deal could come as early as next week.
Buying Evelyn, formerly known as Tilney Smith & Williamson, will strengthen NatWest’s presence in one of the areas identified by its chief executive, Paul Thwaite, as a priority for the bank.
NatWest, which is expected to report strong full-year results next weekend, has begun a simplification drive when Mr Thwaite takes over in 2023.
Analysts said buying Evelyn would represent a logical strategic move for NatWest’s Coutts arm as well as its affluent customer base.
Although it is a big deal, the price of less than £3bn is modest in the context of NatWest’s market capitalisation of around £52bn.
Its shares have increased by nearly 50% over the past year.
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Barclays wanted to buy Evelyn too, but it backed out after learning NatWest’s offer.
Royal Bank of Canada had been linked to a bid, although it was not clear whether it had formally submitted an offer this week.
Evelyn had around £65 billion of assets under management last August, when it reported half-year results, making it a significant player in the sector in the UK.
The Evelyn auction comes amid a flurry of corporate activity in the wealth management sector.
Demographics and the drive to push Britons into long-term saving, investing and financial planning have driven growth in large parts of the industry in recent years – a trend that is expected to continue.
The wealth arm of Canaccord Genuity is also up for auction, with a potential valuation exceeding £1bn.
The acquisition of Evelyn will also see Evelyn’s chief executive, Paul Geddes, return to NatWest if he remains with the business.
Mr Geddes joined the then Royal Bank of Scotland before the financial crisis, running its insurance arm, which included brands such as Direct Line and Churchill.
He oversaw its spinoff from the high street lender, which was then majority government-owned.
Evelyn is owned by private equity firms Permira and Warburg Pincus, which merged their respective firms, Tilney and Smith & Williamson, in 2020.
Evelyn sold its professional services arm to the buyout firm Apax Partners last year.
The auction of the wealth management business is being conducted by Evercore’s bankers.
NatWest and Barclays both declined to comment, while Permira has been contacted for comment.
