Wellcome Trust joins the race to buy RBS branch network

The Wellcome Trust, one of the world’s pre-eminent charities, has made an offer for Royal Bank of Scotland’s branch network.

The charitable foundation said today that it had lodged a bid to buy the reconstituted Williams & Glyn’s network, which has 380 branches across England and Wales.

It emerged today that Wellcome had bid jointly with Blackstone, the private equity house, in the auction for the branch network. The Wellcome-Blackstone constortium is the fifth bidder, alongside three potential trade buyers — BBVA, Santander and National Australia Bank — and a fourth bidder, Sir Richard Branson’s Virgin Money, which has lodged a joint bid with Wilbur Ross, the Wall Street restructuring king.

Sources close to Blackstone maintain that the likelihood of the private equity firm actually buying the RBS branch network is slim because the purchase has yet to be approved by its global credit committee, which is sceptical about the profit margins of UK retail banking.

However, the involvement of the Wellcome Trust — whose last big M&A bid was for Boots in 2007 — brings another dimension to the battle for Williams & Glyn’s. Although the auction is being managed by RBS’s board largely without political interference, teaming up with the Wellome Trust will make a private equity bid more politically palatable. Wellcome bid jointly for Boots with Guy Hands’ Terra Firma, but lost out to a higher bid from KKR.

Meanwhile, the body that manages the Government's stakes in banks has announced that the single Northern Rock and Bradford & Bingley holding company will be headed by Richard Pym and Richard Banks.

Mr Pym, who is currently chairman of B&B and Northern Rock, has been named chairman-designate of the new holding company. Mr Banks, the managing director of B&B, has been appointed as chief executive-designate.

The appointments come after the Government announced plans to merge Northern Rock's "bad bank" with B&B. The "good bank" of Northern Rock, run by Gary Hoffman, is set to be sold back to the private sector later this year.