KKR, Apollo among suitors for National Australia Bank's wealth unit: sources

SYDNEY (Reuters) - KKR & Co Inc KKR.N and Apollo Global Management Inc APO.N are among potential buyers which have conducted due diligence on National Australia Bank's NAB.AX wealth management unit, three sources familiar with matter told Reuters.

FILE PHOTO: The National Australia Bank Logo is seen on a branch in central Sydney, Australia, February 8, 2018. REUTERS/Daniel Munoz/File Photo

The sale of the unit, called MLC, could fetch more than A$1 billion ($688 million), said two of the sources, who declined to be identified as the negotiations are private.

KKR's interest comes on the heels of an agreement in May to pay A$1.7 billion for 55% of the Commonwealth Bank of Australia's CBA.AX wealth unit, Colonial First State.

Spokeswomen for KKR and NAB declined to comment. Representatives for Apollo did not immediately respond to a request for comment outside of regular business hours.

Suitors are expected to submit bids for MLC by Tuesday, one of the sources said. A second source said the timeline for the sale was fluid.

NAB, Australia’s third largest bank, decided to divest its wealth management unit in 2018, but the plan has been delayed by a management overhaul and a special government-appointed inquiry into the financial services sector that found industry-wide misconduct.

It appointed Morgan Stanley MS.N and Macquarie Group MQG.AX to handle the sale of the unit, which manages over A$120 billion in funds. The unit had an operating margin of 0.46% in the six months to March, company documents show.

Blackstone Group BX.N also expressed early interest in MLC, two of the sources said, although it was not immediately clear if it is still interested.

A spokeswoman for Blackstone declined to comment.

A string of scandals and the findings of the year-long financial sector inquiry that ended in February 2019 have prompted Australia’s biggest banks to focus on core businesses and divest wealth management and insurance units.

Reporting by Paulina Duran in Sydney; Editing by Edwina Gibbs