Bradford & Bingley increases cash call as TPG walks

  • Story by: Gemma Westacott
  • Magazine: FTAdviser
  • Published Friday , July 04, 2008

Bradford & Bingley has increased its planned rights issue to £400m after it was announced that US private equity house Texas Pacific Group (TPG) has walked away from the deal.

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TPG had been lined up to pay £179m for a 23 per cent stake in the bank. The move was prompted after the credit rating agency Moody's announced it was downgrading the debt of Bradford & Bingley.

However, the group's decision to pull out of the deal has prompted Bradford & Bingley to increase the amount it needs to raise from its investors in a cash call from the £258m amount previously stated to £400m.

Legal & General, Standard Life, M&G and Insight Investment are understood to be backing the enlarged rights issue at a subscription price of 55 pence.

The decision by TPG follows entrepreneur Clive Cowdery's investment vehicle Resolution's decision last week to also scrap its proposal to invest £400m in the lender in exchange for a controlling stake in the bank.

At the time, Resolution blamed the "the entrenched position of the board of Bradford & Bingley".