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Bank Reject Cash Injection Bid

Fri, 27 Jun 2008

Bradford and Bingley have rejected an offer of a cash injection from a financial entrepreneur . Clive Cowdery had offered to inject £400 million into the bank in a bid to merge smaller banks into a larger, more powerful institution. However, the Bradford and Bingley board rejected the proposals on the grounds that it would have effectively given Mr Cowdery’s company, Resolution, control of the bank.

It is expected that Mr Cowdery will continue in his pursuit of the troubled lender, and is likely to embark on a campaign designed to win support from shareholders . Mr Cowdery already has the backing of four of Bradford and Bingley largest investors, who are looking to alleviate the bank’s current financial difficulties. Those four shareholders – Standard Life, Legal and General, Prudential and Insight – hold an estimated 13 per cent of Bradford and Bingley and have urged the entrepreneur to make an alternative proposal. The current proposal would see shareholders receive 72p a share in return for a 49 per cent stake in the bank.

Bradford and Bingley have struggled in recent times, and have been attempting to raise capital. Having tried to raise capital through a rights issue, the lender recently sold a 23 per cent stake to private equity group TPG Capital.
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