Mervin Davies, the former Standard Chartered Plc Chairman, is set to assemble an investor group to bid for part of the U.K. government's stake in Lloyds Banking Group Plc.

The U.K. Financial Investments Ltd., which is the investment body handling the government stakes in Royal Bank of Scotland Group Plc and Lloyd's announced last month that they are inviting banks to apply to manage the sale of the holding to investors.

Davies, working for New York-based private-equity firm, Corsair Capital LLC, approached Standard Life Plc as well as other sovereign wealth funds to make an offer for some of the UK governments 39% holdings in Lloyd's Banking Group.

To date, the group has not reached an agreement with the UK Treasury.

The Davies group may opt to buy at least 10% of the lender for the deal and is prepared to offer more in line with the government 61-pence breakeven price.