HBOS may merge social housing investments Keepmoat and Apollo to sell as a single entity following its takeover by Lloyds TSB

According to sources close to the situation, private equity groups including Bridgepoint, 3i, Warburg Pincus and Cognetas are circling the two groups. It is believed that Lloyds may sell both in an attempt to reduce its exposure to the property market.

The source said: “It would make sense, given the geography. Apollo pretty much covers the South, Keepmoat is strong in the North, and they virtually meet in the middle.”

Both are equally attractive as standalone businesses, the source added.

HBOS also has stakes in housebuilder Crest Nicholson and retirement homes specialist McCarthy & Stone.