The UK government is reportedly trying to get a Middle Eastern buyer for the takeover of the British arm of Silicon Valley Bank (SVB) – which was shut down on Friday following a run on it – to prevent damage spreading across the technology sector.
SVB UK had nearly 7 billion pounds ($8.42 billion) in deposits when the Bank of England (BoE) deemed it insolvent on Friday, Reuters reported, citing a report in the Financial Times (FT) on Sunday.
The Middle Eastern buyer is one of the leading bidders for the takeover, the report said.
The BoE announced late on Friday that it planned to use its bank insolvency procedure to resolve Silicon Valley Bank UK, which is a legally separate company from the California-based lender that was closed by US regulators the same day.
The move would enable two different buyers to pick up the US and UK arms separately, though potential bidders could acquire both banking units in a comprehensive deal.
The FT report, citing several people familiar with the UK process, said that a Middle Eastern buyer was one of the leading bidders, in a move reminiscent of rescues after the 2008 financial crisis, while British challenger banks have also tabled bids.
One of the people described the “lead white knight” as a UAE- based company as of last night, the FT report said.
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