Dunfermline rescue bid ‘shunned’

A MAJOR international ­investment bank was behind a thwarted attempt to take over the Dunfermline and retain it as an independent building society, it emerged last night.

STRICKEN Dunfermline STRICKEN: Dunfermline

European American Capital was acting for a number of Scottish institutions interested in saving the country’s biggest building society.

But the Nationwide landed the £1.6billion taxpayer-funded deal to take over amid suspicions it had become a “done deal” engineered by the UK Government.

European American Capital is a specialised investment bank based in London, and whose principals include Tim Goode, former treasurer of the Royal Bank of Scotland and chief executive, Treasury and Capital Markets, of Halifax Bank plc. Last night, Mr Goode wouldn’t be drawn on the identities of his clients, but earlier Scottish Friendly Assurance confirmed it was part of a consortium interested in a merger with the Dunfermline as early as mid March.

It was not given an opportunity to meet the building society until Sunday – less than 24 hours before a takeover deal was brokered with Nationwide.

The Glasgow-based company said face-to-face negotiations at an earlier stage could have resulted in a “Scottish-led solution”. ­Independent MSP Margo MacDonald said the consortium had been “blanked” and demanded more answers from ministers.

“What I will be asking is why weren’t they interested and to whom the interest was conveyed,” said Ms MacDonald, adding that she also wanted to know at what stage Nationwide became interested in a takeover.

The Treasury last night insisted the Nationwide deal was an “open and competitive process” and confirmed “other institutions” had taken part in talks with the Treasury, the Bank of England and the Financial Services Authority. It would not say which. Part of the deal required the Nationwide to guarantee the jobs of about 300 branch staff for at least three years, although some redundancies are expected at the Dunfermline’s head office.

Stuart Bernua, Nationwide’s executive director, said his society was approached a few weeks ago to “see whether it was possible for us or other people to take over or merge with the Dunfermline”.

Mr Bernua said: On Friday evening, the Treasury and the Bank of England and the FSA decided they couldn’t find a solution of someone to take it over or invest capital, so they decided that the best way to do it was to invite organisations to bid for the various assets and liabilities.”

Reckless lending led the Dunfermline to the brink of collapse with annual losses of over £24million before Westminster stepped in.

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