The FDIC intends to announce its decision to sell Silicon Valley Bank this weekend, Barron’s advisor has learned.
A person familiar with the FDIC’s plans indicates that the banking regulator hopes to submit a decision on the auction over the weekend.
There are still several moving parts in the auction, which the FDIC said earlier this week is turning into a two-track process, one offering the primary bank, which has been placed into receivership and reopened as a federally controlled bridge bank, and the other limited to SVB Private. It is the wealth management arm of the bank that includes its private banking operations and a group of advisors with more than $15 billion in assets under management.
“I think it’s everyone’s ambition to deduce this,” says the person, who spoke on condition of anonymity because he was not authorized to speak publicly on the subject. “I don’t think anyone wants the bridge bank to last longer than it has to.”
Wednesday, news outlets reported That the Federal Insurance Corporation (FDIC) was Deadline extension For SVB Private bids until Friday evening, when it is due for bids for the bridge bank. Earlier this week, the FDIC set a Wednesday evening deadline for bidding for SVB Private.
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After the bidding rounds conclude, and before markets reopen Monday, the FDIC hopes to announce a winner, said the person familiar with the plans. The situation is fluid enough that the announcement could simply necessitate an additional extension of the bidding process, though the FDIC aims to finish the process on short notice.
A single sale of the SVB that keeps the bank and wealth units together seems increasingly unlikely. But this is not due to a lack of interest. the FDIC noticed When announcing the two-track auction process, it saw “significant interest from multiple parties,” but “the FDIC and bidders require more time to explore all options in order to maximize value and achieve an optimal outcome.”
Will Brown, CEO and managing partner at Formidable Asset Management, is eyeing some deep-pocketed Wall Street firms that have already participated in SVB, either as a potential buyer or underwriter, as potential buyers.
Some of those suitors who looked at the whole package, [such as]
c. B. Morgan Chase
And
He may have already done some due diligence and remain interested in SVB Private,” says Brown. Goldman Sachs
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is another that comes to mind, given their involvement in the failed capital raise that was floated prior to the bank run.”
Goldman and JPMorgan Chase declined to comment.
Brown also brings up the idea that a private equity fund or hedge fund could be involved in a potential buyout, which is a plausible scenario for SVB Private given the large influx of private equity financing into the RIA field.
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The two-track bidding will likely continue until the auction ends, Brown says, saying it is unlikely at this point that a buyer will emerge for the entire entity.
“The deal for the entire SVB business remains, in our view, a low possibility,” he adds.
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