Own Westpac shares? The plan for a $1 billion division sale

Bidders are queuing up to buy the bank's investment platform segment, according to reports.

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Key points

  • Westpac shares ended the week at $19.90 after slipping into the red on Friday
  • The bank is set to sell its investment platform next month to the highest bidder
  • Westpac shares are down more than 20% over the past 12 months

The Westpac Banking Corp (ASX: WBC) share price ended Friday in the red, down 0.2% to $19.90. It comes as a number of bidders are reportedly lining up to acquire the bank's investment platform business, when it attempts to sell in August.

Reports have surfaced suggesting Westpac has various finance giants interested, ranging from asset managers and investment banks to private equity.

Westpac's $1 billion divestment

It's understood that non-binding bids for the bank's planned divestment of its investment platform segment have come in at around $1.2 billion.

This was below Westpac's expectations of around $1.5 billion, The Australian reports.

Meanwhile, the intended sale – planned for next month – is facing inquisitions from a number of players interested in participating in the bid.

Bain Capital and Colonial First State are purportedly interested, while Macquarie Group Ltd (ASX: MQG) and AMP Ltd (ASX: AMP) were reported to be "best-placed to buy the unit", The Australian said.

The planned sale comes at the same time rival banking giant Australia and New Zealand Banking Group Ltd (ASX: ANZ) looks to acquire accounting software firm MYOB in a $4.5 billion transaction.

ASX-listed banks had a tough day on Friday after US investment banking giant JPMorgan Chase & Co posted weaker earnings overnight and announced it was set to wind back its buyback program. The S&P/ASX 200 Financials Index (ASX: XFJ) ended the day's trading down 0.39%.

However, the Westpac share price has been on a downward trend for the past 12 months and now rests around 20% in the red over that period (see graph below). It has also fallen 8% so far this year.

TradingView Chart

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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