San Diego-based Sempra Energy remains tight-lipped about reports that JPMorgan Chase is now the exclusive bidder for the Royal Bank of Scotland’s (RBS) 51% share of its trading joint venture with a unit of Sempra. The price remains close to $4 billion for the unit, which trades energy, metals and other commodities through RBS Sempra Commodities, according to reports by news service Reuters.
Recent reports identified three leading bidders for the RBS stake, and as reported by NGI late last month, Sempra has said it wants to remain in the lucrative trading space (see NGI, Dec. 14, 2009). Spokespeople for the utility holding company continue to refuse to confirm or deny the current reports. A San Diego-based spokesperson Wednesday refused to comment on the latest speculation.
A trio of bids in the $4 billion area were cited, with the three leading bidders said to be Deutsche Bank, JPMorgan Chase and Australia-based Macquarie Group. The latter firm has been rapidly expanding its energy sector footprint in North America in recent years, including physical trading operations centered around major utilities in the Pacific Northwest and western Pennsylvania (see NGI, Jan. 18).
RBS paid $1.7 billion for its majority interest in the RBS Sempra Commodities joint venture when it was formed in April 2008 (see NGI, April 7, 2008).
Investment bank Lazard Ltd. is handling the potential sale for RBS, but it would not comment on reports that an announcement was only a few weeks away. A transaction is expected in late January or February, according to Reuters.
The RBS joint venture pullout was prompted in early last November as part of its much larger restructuring with United Kingdom and European Commission (EC) financial authorities since the UK government now owns the majority interest in RBS. Initial reports that this move was imminent surfaced out of the UK early last November and Sempra issued a statement at that time to try to assure investors that any breakup would be orderly and could take several years.
Reuters reported Wednesday that JPMorgan has recently picked up both assets and market share, and earlier this month reported fourth quarter 2009 profits of $3.3 billion, driven by its investment banking operations. It reportedly is willing to pay a higher price than the other two suitors.
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