A Dutch financial group has offered the token sum of one pound ($1.60) for most of Barings PLC and its hefty liabilities, an executive close to the failed British bank said Thursday.
Barings’ administrators favor the deal. But before it can close, the ING Group has demanded a look at the books of Britain’s oldest investment bank to make sure that no potential land mines exist, said an executive familiar with the talks, speaking on condition of anonymity.
It was unclear how long it might take ING to make up its mind, or whether Barings can be back in business before a final deal is done.
“It’s early days yet,” said a Barings executive, also speaking on condition of anonymity. “We are cautiously optimistic.”
Such a selling price would once have seemed impossible for the venerable British bank that financed British colonial expansion and counted kings and queens among its clientele.
But after a disastrous series of trades on the Singapore futures market wiped out Barings, it was the best that a team of court-appointed administrators has been offered.
The arrangement between ING and Ernst & Young, the outside accountants who were placed in control of Barings on Sunday, was reached Thursday afternoon. Several hours earlier, 28-year-old English trader Nick Leeson, who is blamed for the collapse, was captured in Germany.
If ING clinches the deal, it will acquire Baring Brothers and Co., London’s oldest investment bank, along with Baring Securities and Baring Asset Management.
For the time being, ING Internationale Nederlanden Groep NV - appeared to have beaten out Dutch rival ABN Amro Bank, as well as a host of other interested suitors, including National Westminster Bank of Britain. NatWest said late Thursday it might take another look at Barings if the deal with ING falls through.
The exclusive talks with ING were announced in a statement from Nigel Hamilton, Alan Bloom and Maggie Mills, partners in the international accounting firm Ernst & Young, the firm appointed Sunday to run Barings.
The administrators declined to elaborate on the arrangement, saying they are forbidden to do so until the parties can take a proposal back to the High Court for approval.
There was no immediate comment from ING, based in Amsterdam. Its investment bankers, Robert Fleming & Co. Ltd., in London did not immediately return phone calls from The Associated Press.