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B&B FACES INVESTOR ROW

B&B struck a deal with TPG in a desperate bid to raise £400m

Thursday June 12,2008

By Andrew Johnson

BRADFORD & Bingley is facing a major shareholder row over the deal it struck with private equity group TPG in its desperate efforts to raise £400million.

Investor body the Association of British Insurers said the fact TPG would be given first choice in future share sales to avoid diluting its 23 per cent stake would prove “seriously detrimental to the interests of existing shareholders”.

The ABI’s director of investment affairs, Peter Montagnon, added: “The anti-dilution arrangements create a division between TPG compared to other shareholders, which are at a disadvantage. This conflicts with fundamental principles.

“Shareholders will have to ask the board some penetrating questions.”

The ABI statement followed a meeting of its investment committee, made up of major institutional investors.

TPG invested £179million in B&B at 55p a share after the bank’s initial £300million rights issue plans collapsed after a profits warning.

The bank is seeking a further £220million, after costs, through a revised rights issue. B&B shares fell 5bp to 66p.

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