Global clearing institution Bank of London has submitted a formal proposal to acquire the Silicon Valley Bank’s subsidiary in the United Kingdom, according to a statement disclosed by Reuters on March 12.
As per the statement, the purchase is an effort from a consortium of private equity firms:
“A consortium of leading private equity firms, led by The Bank of London, confirms it has submitted formal proposals to His Majesty’s Treasury, The Prudential Regulation Authority at The Bank of England and the Board of Silicon Valley Bank UK.”
Reuters earlier reported that other U.K. financial institutions were reviewing similar moves, including the SoftBank-owned lender OakNorth Bank. Abu Dhabi Investment vehicle ADQ were also interested in the SVB’s arm.
A plan to rescue startups and tech companies affected by SVB’s collapse has been drafted by British authorities. The emergency plan will include a cash lifeline to a number of businesses.
Prime Minister Rishi Sunak said the government is working “at pace” to deliver a plan in the coming hours that would secure “operational liquidity and cash-flow needs” for Silicon Valley Bank’s UK clients. The U.K. Treasury said in a statement that it “will bring forward immediate plans to ensure the short-term operational and cash flow needs of Silicon Valley Bank UK customers are able to be met.”
On March 10, the Bank of England (BoE) halted operations of SVB branches stating that the bank has a “limited presence” in the U.K. and no “critical functions” supporting the financial system. A letter signed for over 200 founders and CEOs of UK tech companies, however, claimed that many fintech firms managed banking operations through SVB, and will “therefore go into receivership imminently unless preventative action is taken.”
U.S. regulators and White House officials are reportedly working over the weekend to address the SVB collapse. Treasury Secretary Janet Yellen noted during an interview that a major bailout isn’t being considered, but investors protection efforts are underway.
The U.S. Federal Deposit Insurance Corporation (FIDC) reportedly started an auction process on March 11 night for Silicon Valley Bank. Bids are allegedly open for just a few hours, before the process closes later this Sunday.