Clive Cowdery has launched an audacious £400m bid to take control of Bradford & Bingley (B&B), with a plan to use the company to consolidate the UK's smaller banks and lenders.
Under his new Resolution Limited vehicle, Cowdery has teamed up with four of the largest B&B investors – Standard Life, Legal & General, Prudential and Insight – to force the lender to abandon its plan to offload a 23% stake to US private equity firm TPG.
Resolution says it plans to turn B&B into a “new, larger and stronger bank” by consolidating the current fragmented UK smaller banks and lenders sector. It says consolidation would require a £2bn capital investment over the next two years.
However, the Bradford & Bingley board has rejected the proposal, saying it would not recommend the deal to shareholders in its "current form".
Cowdery, who owns about 2.9% of B&B stock, is believed to value the capital raising plan at 72p a share, compared to the 55p B&B offers in its rights issue.
B&B's value has plummeted by 75% this year, with its share price falling to 66p last night.
Resolution says it will be working with Bradford & Bingley, regulators, rating agencies and B&B investors over the next two weeks with a view to a possible proposal by 4 July.
“Bradford & Bingley investors would be able to participate in a clear strategy for consolidation and restructuring across the sector, giving access to synergies and leading to a stronger capital and trading base for the company,” the Resolution statement reads.
“Resolution would assist in the stabilisation and growth of the enlarged group during its consolidation and restructuring phase.
“This timetable would allow completion of any proposed capital injection on broadly the same timetable as the TPG capital raise and restructured rights issue, without the uncertainty of a rights issue.”
Cowdery's move comes just months after he sold his life company, Resolution plc, to rival Hugh Osmond’s Pearl Group. The £4.98bn deal netted Cowdery £147m.IFAonline
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