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Report: Virgin Money close to placing bid for Co-op Bank

Virgin Money Holdings (UK) Plc is set to place a bid for Co-operative Bank Plc in the coming days, The Daily Telegraph reported April 2, citing a "person close to the process."

Interested parties can place bids for the struggling lender until April 4, the report noted, although insiders have warned that interest is likely to focus on chunks of Co-op Bank instead of the entire lender. Metro Bank Plc and OneSavings Bank Plc earlier expressed interest in acquiring only parts of Co-op Bank.

U.S. private equity firms J.C. Flowers & Co. LLC and Cerberus Capital Management LP, as well as U.K.-based CYBG Plc, which owns the Clydesdale Bank Plc and Yorkshire Bank brands, are also reportedly eyeing Co-op Bank, The Times of London reported April 3.

Barring a sale, the challenger bank may have to raise £750 million or be wound down, The Times noted. The Bank of England earlier hired advisers to prepare a rescue plan for Co-op Bank in case it fails to find a buyer, with Co-op Bank likely to be taken over by its lenders through a debt-for equity swap overseen by the regulator.

Meanwhile, the Co-operative Group, which owns 20% of Co-op Bank, is set to write down the value of its holding to zero upon announcing its results April 6, resulting in an approximately £140 million charge that will push the group to a statutory loss for the 2016 financial year, The Times added.