B&B cancels EGM as focus turns to enlarged rights issue

  • Story by: James Redgrave
  • Magazine: FinancialAdviser
  • Published Friday , July 04, 2008

Beleaguered bank Bradford & Bingley has cancelled its proposed extraordinary general meeting (EGM) on Monday (7 July), after Texas Pacific Group (TPG) pulled out of buying a 23 per cent share in the company.

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The news follows a string of controversies at the bank, which last week saw the Clive Cowdery owned investment vehicle Resolution pull out of negotiations to buy up to 30 per cent of the business for £400m, after Bradford & Bingley refused to offer due diligence.

The decision to sell to US investment bank TPG announced last month (June), which shareholders were due to vote on at the meeting on Monday (7 July), was in response to share prices plummeting after the announcement of £8m losses in the first quarter of 2008.

Bradford & Bingley's proposed rights issue was also revised down to 55p per share, which was also set to be settled at the EGM.

TPG decision to pull out of the deal was prompted after the credit rating agency Moody's announced it was downgrading the debt of Bradford & Bingley. (See earlier article.)

As a result of TPG's decision, Bradford & Bingley has increased its planned rights issue to the full £400m. However, the enlarged cash call has an unchanged 55p subscription price.

The larger rights issue is understood to be backed by large shareholders Insight Investments, Legal & General and M&G and Standard Life.