5 ms·

Oddly, it had been reported that the bidding process for the bank was 'competitive' and that there were several interested parties. I can't see how that could h

Oddly, it had been reported that the bidding process for the bank was 'competitive' and that there were several interested parties. I can't see how that could have been true if the final price was a token £1 ?

sebzim4500 4y ago
Maybe other bidders weren't willing or able to guarantee all deposits?
mytailorisrich 4y ago
£1, plus all deposits, plus all other liabilities (from what I understand). Maybe the other bidders were not offering that much...
fredoralive 4y ago
Possibly the other bidders were seen as less robust and able to absorb the liabilities of SVB UK?
Teandw 4y ago
The token £1 is just a payment requirement for ownership. The bidding process for insolvent companies is essentially who will take on the most "problems" for the best outcomes for the business. So one company may bid saying they want to acquire X parts of the company but can not take on the advertising arm or the quality assurance part of the company; which means jobs losses etc. Another company may say we'll acquire all of the company but not the freehold properties the business owns. The liquidation team then have to decide which bid offers the best likely outcome for the creditors/business. The £1 isn't technically what they're paying for the company, as they're taking on debt, leaseholds, pension funds etc. Their bid is technically tens or hundreds of millions depending on the situation.
dkjaudyeqooe 4y ago
Usually the "buyer" is being paid to take it off the regulator's hands, so the actual price is negative. The token (positive) amount is to make it easier to deal with in a legal sense. Thus the bids are for the lowest subsidy instead of the highest price.
deleted 4y ago
[deleted]
jalapenos 4y ago
I imagine it was "which one of you wants this steaming mess?". HSBC: [sigh], ok fine why not The token is just to make the sale contract binding

sebzim4500 4y ago

Maybe other bidders weren't willing or able to guarantee all deposits?

mytailorisrich 4y ago

£1, plus all deposits, plus all other liabilities (from what I understand). Maybe the other bidders were not offering that much...

fredoralive 4y ago

Possibly the other bidders were seen as less robust and able to absorb the liabilities of SVB UK?

Teandw 4y ago

The token £1 is just a payment requirement for ownership. The bidding process for insolvent companies is essentially who will take on the most "problems" for the best outcomes for the business. So one company may bid saying they want to acquire X parts of the company but can not take on the advertising arm or the quality assurance part of the company; which means jobs losses etc. Another company may say we'll acquire all of the company but not the freehold properties the business owns. The liquidation team then have to decide which bid offers the best likely outcome for the creditors/business. The £1 isn't technically what they're paying for the company, as they're taking on debt, leaseholds, pension funds etc. Their bid is technically tens or hundreds of millions depending on the situation.

dkjaudyeqooe 4y ago

Usually the "buyer" is being paid to take it off the regulator's hands, so the actual price is negative. The token (positive) amount is to make it easier to deal with in a legal sense. Thus the bids are for the lowest subsidy instead of the highest price.

deleted 4y ago

[deleted]

jalapenos 4y ago

I imagine it was "which one of you wants this steaming mess?". HSBC: [sigh], ok fine why not The token is just to make the sale contract binding