Resolution launches bid for Bradford & Bingley

Tuesday, 24 June 2008 12:00 AM

Resolution - the investment vehicle of entrepreneur Clive Cowdery - yesterday launched an audacious bid to assume control of Bradford & Bingley.

The bank - which is Britain's largest buy-to-let lender - has had a torrid 2008, slipping £8 million into the red during the four months to April, following an increase in defaults on its mortgage book and wholesale funding concerns.

B&B also parted ways with chief executive, Stephen Crawshaw, who cited "a serious cardiovascular condition", earlier this year, and was replaced by chairman Rod Kent.

In response Bradford & Bingley had agreed an £179 million investment deal with Texas Pacific Group, augmenting a £258 million rights issues already under development.

However, in a dramatic move from Mr Cowdrey, both these deals would now be scrapped and replaced with the Resolution proposals.

While B&B would remain a listed company, Resolution would take a controlling percentage of the shares in the organisation.

The funds for the deal are likely to come from the four shareholders in discussion with Resolution; Insight, Legal & General, Prudential and Standard Life.

Under the plans Bradford & Bingley would then become the corner stone of a larger collection of banks, consolidating the second tier of the banking sector.

Resolution is pushing for B&B's board to recommend its plan by July 4th.

In a statement B&B said: The board of Bradford & Bingley note the announcement from Resolution, an investment vehicle backed by Clive Cowdery.

"The board confirms that on June 20th 2008 it received an indicative non-binding funding proposal that would involve Resolution's taking effective control of the company.

"The board carefully considered this proposal and on June 22nd informed Resolution that it could not recommend the current form of the proposal to shareholders.

"The board continues to recommend the restructured rights issue and TPG Investment to its shareholders and intends to publish a prospectus relating to the shares to be issued pursuant to the restructured rights issue and TPG Investment this week," the statement added.

The shareholders' meeting to seek approval for the restructured rights issue and TPG Investment will be held on 7 July 2008.

Shares in B&B were up 13.6 per cent at 08:42, trading at 75 pence per share, following the announcement.

Chris O'Toole

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