Doubts about financial backing and low price dog sale

Former NU boss Patrick Snowball and private equity groups BC Partners and Apollo have made an informal offer for Royal Bank of Scotland's (RBS’s) insurance assets including Direct Line, Churchill and NIG, the FT reports.

"There are two big ifs on this one", said a person familiar with the negotiations, according to the FT over the weekend. "One is financing and two is if RBS still wants to sell".

It points out that a buy-out would be difficult to finance. Banks are refusing to lend money for almost any leveraged buy-outs. Even when debt is available from banks, it is often expensive.

Mr Snowball, BC, Apollo and RBS all declined to comment.

In a piece on the plummeting share value of RBS under its new CEO Stephen Hester, The Guardian said he was reconsidering the sale of its insurance arm. "If I can get a good price, I will sell, if I cannot, my job is to protect shareholder value. In the current environment, I expect it to be rather difficult to get a good price."