Bradford & Bingley shares crashed 16% to 42p yesterday, dropping further below the 55p-a-share price of its £400m rights issue, as the City speculated that the buy-to-let lender is worthless, The Telegraph reports.
Pali International, a stockbroker, cut its target price for the bank to "zero" and calculated B&B's "net present value" to be -14p. In a separate note, banking specialist Fox-Pitt, Kelton said: "We cannot rule out the possibility of an effective failure with shareholders receiving little or nothing for their shares." This came in the wake of last week's Moody's downgrade and decision by TPG to pull its planned £179m investment. In frantic efforts to keep B&B's capital raising on track, four of its core shareholders stepped in to support an enlarged £400m rights issue alongside the six larg...
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