Apollo Global Management Assembling Bid to Buy Silicon Valley Bank
Apollo Global Management is reportedly asking for backing for its bid to buy Silicon Valley Bank.
The private equity firm has talked with Andreessen Horowitz, General Catalyst, Redpoint Ventures and other venture capital (VC) firms to help finance a bid for the assets of the failed bank, The Information reported Tuesday (March 14), citing an unnamed source.
It’s not known if any of the firms have agreed to participate, according to the report.
Apollo Global Management did not immediately reply to PYMNTS’ request for comment.
This news follows a Monday report by the Financial Times (FT) that said a group of venture capital firms — including Andreessen Horowitz, General Catalyst and Khosla Ventures — were working to reclaim parts of Silicon Valley Bank.
The firms have been in discussion since the bank’s shutdown and takeover by regulators last week about how to allow it to keep lending to and investing in tech sector companies, according to the FT report, which cited unnamed sources.
The Federal Deposit Insurance Corporation (FDIC) tried to sell Silicon Valley Bank in a Sunday (March 12) auction but none of the largest United States banks made a bid, and the one offer that was made — by another institution — was rejected by the FDIC.
The failed auction had aimed to raise enough money to repay Silicon Valley Bank’s depositors after one of the largest banking failures in U.S. history.
The United Kingdom arm of the failed bank was sold, however. Banking giant HSBC bought it for one British pound (about $1.22) and reportedly plans to inject $2.1 billion into Silicon Valley Bank UK to ensure that it can conduct business as usual.
A day after the failed auction, on Monday (March 13), it was reported that the FDIC plans to try again, although the timeline of a second auction was unknown.
The FDIC can offer additional incentives to buyers in a new auction because regulators have said that a failure of Silicon Valley Bank would be a threat to the entire financial system.
On Tuesday, the head of the FDIC-operated “bridge bank” that replaced the failed bank, Silicon Valley Bridge Bank, N.A. CEO Tim Mayopoulos, said in a press release that the bank is open for business and welcoming new customers as well.
“The number one thing you can do to support the future of this institution is to help us rebuild our deposit base, both by leaving deposits with Silicon Valley Bridge Bank and transferring back deposits that left over the last several days,” Mayopoulos said in the release.