UK Government Temporarily Halts Natwest Retail Bidding Process Without Public Announcement

The Treasury has discreetly halted the bidding process for managing the sale of its stake in Natwest, raising doubts about the structure of the much-hyped ‘Tell Sid’-style retail deal.

The government, retaining approximately 30 per cent ownership of the bank post-financial crisis bailout, had initiated a competitive tender process with retail investment firms to facilitate the sale of a portion of its remaining stake to the public.

However, City A.M. are reporting that these plans are now on hold following a mid-March communication from the government to bidders, stating the suspension of the process for strategic reassessment. The Treasury explained, “This decision reflects our emerging views on the type of set-up and infrastructure required to deliver this complex transaction.”

Reportedly, firms such as AJ Bell and Hargreaves Lansdown were contenders for handling the sale and had submitted bids, though neither firm responded to requests for comment. Ministers are exploring alternative disposal methods to reduce the government’s stake, including accelerated bookbuilds and directed buybacks. Natwest has also sought shareholder approval to increase its buyback capacity from five to fifteen percent within a twelve-month period.

This development follows the government’s stake in Natwest falling below 30 per cent for the first time since 2009, relinquishing its status as a “controlling shareholder” under UK listing rules. The Treasury maintains that the timeline for the retail deal remains unchanged, with a potential sale earliest in the summer, contingent upon favourable market conditions and ensuring value for taxpayers. The bidding process, conducted confidentially by the government, involved firms signing non-disclosure agreements, according to Bloomberg.

The planned retail sale of the bank is viewed as pivotal in rejuvenating retail investment in the UK, with ministers likening it to the ‘Tell Sid’ campaign promoting British Gas privatization in the Thatcher era. Any deviation from or delay in these plans would mark a significant retreat for Hunt and City Minister Bim Afolami, who have been fervent advocates for the share sale. Afolami, in a February interview, touted the Natwest sale as a catalyst for reigniting confidence in the broader market.