Monday June 23, 06:03 PM
Resolution proposes B&B rights alternative
LONDON (ShareCast) - Financial services restructuring firm Resolution is in talks with Bradford & Bingley (LSE: BB.L - news) about
a possible investment that would replace the mortgage lender's £400m restructured rights issue and private equity investment. Resolution said it has been developing plans for a consolidation of the smaller banks and lenders in the UK banking sector, which it expects to cost around £2bn over the next two years. It is currently in discussions with B&B about an appropriate structure for the capital injection that could lead to a proposal led and funded by investors in the mid-cap bank. Some of the structures under consideration might take Resolution's stake to over 30%, it said, but a waiver of the obligations on the firm to make a general offer are being sought. B& B had already agreed to sell a 23% stake to US private equity group TPG and reduce the size of its rights issue to £258m, raising £400m net for B&B in total.
Any recommended proposal is expected by 4 July.
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