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Bank of Nova Scotia Enters Bid for National City

Reuters
Friday, 11 Apr 2008 | 8:44 AM ET

Bank of Nova Scotia has jumped into the bidding for National City, which is under regulatory pressure to bolster its capital or find a buyer before reporting quarterly results this month, the Wall Street Journal reported Thursday.

The parent of Toronto-based Scotiabank has offered to buy at least a stake in Cleveland-based National City, the Journal said in its online edition. A handful of US banks and private-equity firms already have expressed interest in helping to shore up National City's balance sheet, according to people familiar with the matter, the Journal said.

National City shares initially gained on the report but were off 1.2 percent in premarket trading.

Representatives from National City and Bank of Nova Scotia could not be reached for immediate comment. Bank of Nova Scotia, with a market value of about $45 billion, is better positioned than many U.S. banks to buy National City, which has seen its value plunge to about $5 billion.

On April 1, National City said its board was reviewing a range of strategic alternatives.

Scotiabank could be after a minority stake in National City as a way to grab a foothold in the United States, where it currently lacks a retail-banking presence, people familiar with the talks told the Journal.

Corsair Capital, a New York private-equity firm focused on the financial-services sector, also is considering making a bid, people familiar with the matter told the Journal. Buyout firm Warburg Pincus has withdrawn from the bidding process, another person familiar with the matter told the Journal.

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