Goldman, Blackstone bid for Northern Rock’s Granite, say sources- Reuters

(Reuters) – A consortium including Goldman Sachs and Blackstone has bid for Northern Rock‘s 13 billion pound ($20 billion) mortgage securitization vehicle, three sources familiar with the matter said on Wednesday.

Bids for the asset Granite, which was a factor in the collapse of Northern Rock and Bradford & Bingley and their subsequent bailout by the British government, went in on June 5, the sources said, declining to be named.

U.S. buyout firm Blackstone teamed up with investment bank Goldman Sachs, U.S. hedge fund Och Ziff, and the Special Situations arm of TPG Capital to submit a bid, the sources said.

Government-backed Royal Bank of Scotland (RBS) had also considered making a bid, according to people familiar with the matter, but it was unclear whether the bank submitted a proposal.

The sale process was announced by the government in March. The assets are being sold by UK Asset Resolution (UKAR), Britain’s so-called bad bank which is winding down the loans of Northern Rock and Bradford & Bingley.

Goldman Sachs and Och Ziff were not immediately available to comment. Blackstone, TPG, RBS and UKAR declined to comment.

TPG previously worked with Goldman Sachs on Lloyds’ Lundy loan portfolio, while TPG and Blackstone bought specialist lender Kensington last year.

Commercial First, a consortium led by JP Morgan, purchased 2.7 billion pounds of Northern Rock and Bradford & Bingley mortgages from the government last October.

Finance minister George Osborne is keen to sell the government’s banking assets as soon as possible to recoup taxpayers money after the Conservatives were re-elected with a surprise majority in May.

The government is expected to complete the full privatisation of Lloyds Banking Group in the next year and could start selling shares in RBS later this year. The government spent 66 billion pounds bailing out banks during the financial crisis.

The sale of Granite is also being overseen by UK Financial Investments, which manages the banking assets acquired by the British government through bail-outs during the crisis.