RBS aims to flush out fresh branch bids Royal Bank of Scotland is desperately trying to drum up interest in the portfolio of 316 branches it must sell under EU state-aid rules, and expand the bidding away from lowball private equity offers. People close to the process said the bank, which has been forced to relaunch a sale process after a two-year-old deal with Spain's Santander collapsed, was particularly keen that Nationwide, Britain's biggest building society, should re-enter the process. Nationwide said in mid-December that it had not submitted a bid by the first-round deadline, opting instead to pursue growth organically. That has left the field dominated by private equity money, led by joint bidders JC Flowers and Apollo, and Virgin Money, which is backed by buyout firm WL Ross. Interest has also been expressed by Anacap and Corsair Capital, two lower-profile funds. Depending on the final valuation of the portfolio, which carries the Williams & Glyn's brand name, the takeover could end up being the biggest private equity acquisition yet of a British bank. The Williams & Glyn's franchise comprises close to £19bn in assets, 250,000 small business customers, 1.8m retail savers and borrowers, and 5,000 employees. In the first half of the year, it generated annualised operating profit of £372m. RBS's deal with Santander collapsed in October after the Spanish bank said IT integration issues were proving too complex. The sale price of £1.65bn had already been set to fall by as much as £350m, on a par with the unit's book value, after poor profitability cancelled out performance-based elements of the offer. Those involved in bidding say private equity offers could value the business at as little as £650m, in line with the average valuations put on European banks of about 50 per cent of book value. "There's a queue of bidders who want a bargain," said one person close to the transaction. If Nationwide, which is understood to have continued informal contact with RBS, were formally to return to the fray, that could improve the potential sale price for the branches, bankers said. To date, the biggest private equity-backed bank deal in Britain was Virgin's £820m takeover of Northern Rock in 2011. WL Ross, the buyout vehicle of the billionaire investor Wilbur Ross, owns 45 per cent of Virgin Money, following his backing of the Northern Rock deal. Virgin is seen within the industry as the favourite bidder. But JC Flowers has devoted substantial resources to its bid, too. David Morgan, the former chief executive of Australian bank Westpac, now head of Europe and Asia for JC Flowers, has been lined up to be executive chairman of the new group, according to Chris Flowers, the former Goldman Sachs banker who runs JC Flowers.