Global clearing house Bank of London has submitted a formal proposal to acquire the UK subsidiary of Silicon Valley Bank, according to a statement disclosed by Reuters on March 12.
According to the statement, the acquisition was the effort of a consortium of private equity firms: "A consortium of leading private equity firms led by the Bank of London has confirmed that it has submitted formal proposals to HM Treasury, the Bank of England Prudential Regulation Authority and the board of SVB." Reuters earlier reported that other British financial institutions were considering similar moves, including SoftBank-owned OakNorth Bank. Abu Dhabi investment firm ADQ is also interested in the SVB affiliate.
British authorities have drawn up a plan to rescue start-ups and tech firms hit by the collapse of SVB. Contingency plans will include a cash lifeline for many businesses. British Prime Minister Rishi Sunak said the government was working "step by step" on a plan to ensure the "operational liquidity and cash flow needs" of SVB's UK clients. HM Treasury said in a statement that it "will present immediate plans to ensure that the short-term operational and cash flow needs of SVB's UK clients can be met."
On March 10, the Bank of England (BoE) ceased operations at its SVB branch, saying the bank had a "limited presence" in the UK and had no "critical functions" to support the financial system. However, a letter signed by more than 200 founders and CEOs of UK tech companies claims that many fintech companies manage their banking through the SVB and will therefore "go into immediate administration unless precautions are taken".
U.S. regulators and White House officials were reportedly grappling with the SVB debacle over the weekend. Treasury Secretary Janet Yellen pointed out in an interview that a large-scale rescue plan has not been considered yet, but investor protection efforts are underway.
According to reports, the FDIC began the auction for Silicon Valley Bank on the evening of March 11. Bids will be open for a few hours before the process closes on March 12.
