B&B resists pressure to open its books

Resolution, the investment fund run by Clive Cowdery, has so far failed to persuade Bradford & Bingley to open its books following its proposed 400m investment, with the two sides remaining locked in talks last night.

Banking advisers from both sides met on Tuesday, as Resolution attempted to persuade the beleaguered mortgage bank of the merits of its offer that would see it take effective control with a stake of 49 per cent.

Lazard, the bank advising Resolution, fleshed out its proposal to Goldman Sachs, B&B's advisor, at its meeting on Tuesday. Sources close to Resolution were confident they had done enough to persuade B&B to call a board meeting to approve granting due diligence to the fund.

Yet B&B has so far been unwilling to countenance Resolution's proposal, and the two sides remained deadlocked last night, although one source close to the deal said talks were continuing.

Resolution had also scheduled meetings with significant shareholders in B&B yesterday to persuade them of the merits of the offer, and these are expected to continue throughout the week.

Further details of the proposal emerged late on Tuesday. A source with knowledge of the plan compared it to yesterday's capital- raising by Barclays.

He said other retail investors would be invited to take part in the investment in Resolution's 400m offer, which is backed by four of B&B's largest shareholders, through a "clawback" process. Other details of the bid have so far remained under wraps, but the group remains confident it will be ready to publish its proposals by 4 July.

Resolution revealed this week that its initial approach to B&B's board had been rebuffed, after a dramatic move to gatecrash the bank's fundraising plans. It is understood that significant shareholders Insight, Legal & General, Prudential and Standard Life approached Resolution, as they were unhappy at B&B's original plan.

B&B was preparing to raise 258m through a rights issue, and had agreed to a significant investment from the US buyout group TPG, which offered 179m for a 23 per cent stake.

Both TPG and Resolution said they would use the investment in B&B to kick off a consolidation drive among the smaller banks in the UK.

Copyright c 2008 Independent Newspapers UK Limited. All rights owned or operated by The Independent.
Provided by ProQuest Information and Learning Company. All rights Reserved.