LONDON — Richard Branson will on Tuesday announce plans to sell a 21% stake in Virgin Money to billionaire investor Wilbur Ross for £100 million ($152 million), which will allow the consumer-credit business group to accelerate its expansion in U.K. banking, a person familiar with the situation said Monday.
An announcement outlining the deal, which will result in Branson's shareholding in Virgin Money falling to 79%, is expected early Tuesday, the person told Dow Jones Newswires.
Ross has also earmarked a further GBP500 million to Virgin Money, which would give the group the firepower "to look at some of the acquisition opportunities," whether it be Royal Bank of Scotland PLC, Northern Rock PLC or parts of Lloyds Banking Group PLC, the person said.
Virgin Money will express its interest in RBS's branches Tuesday — the deadline for indicative bids, the person added.
Banco Santander SA and National Australia Bank Ltd. have also decided to bid for RBS's branches, people familiar with the situation said Thursday. Others are also considering the move.
The Edinburgh-based bank has been ordered by the European Commission to sell its 318 U.K. branches after receiving around £46 billion in capital injections from the U.K. government and other financial support. RBS is 84%-owned by the U.K. government.
RBS shares closed at 45 pence Thursday, valuing the company at £25.2 billion.
Ross couldn't be reached for comment Monday.
Reuters quoted Ross on Sunday as saying that he had made the investment in Virgin Money and that he was prepared to commit further funds to support Virgin Money's bid for the RBS branches.