B&B underwriters left with 73% of shares after rights issue take-up

| August 18, 2008
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Troubled buy-to-let lender, Bradford & Bingley (B&B), has confirmed that 27.8% of its new shares, which were on offer at 55p each, have been taken up by investors.

Consequently, underwriters, Citigroup and UBS will have to place the remaining 597 million new shares, worth £328.3 million, by Friday.

Citigroup and UBS are being supported by four major shareholders and six banks - HSBC, Lloyds TSB, HBOS, Barclays, Abbey and Royal Bank of Scotland.

However, take up of B&B’s shares has exceeded that of the recent fundraising by HBOS, after just 8.29% of its shareholders signed up to the rights issue, which closed last month.

B&B has also announced that former Alliance & Leicester boss, Richard Pym, has become chief executive with immediate effect, after Steven Crawshaw stepped down in June for health reasons.

Rod Kent, B&B’s chairman, said Mr Pym is an ideal candidate for the job.

B&B has had a difficult few months after news of the £400 million rights issue emerged. The mortgage lender has suffered due to the property market slowdown. However, it hopes that Mr Pym’s appointment will signify the end of a difficult period.

Shares in the lender have suffered lately and have traded near record lows after two previous attempts at fundraising collapsed.

Last month, US private equity firm Texas Pacific Group (TPG) pulled out of a deal, after credit rating agency, Moody’s, downgraded the lender’s debt. TPG had planned to inject £179 million into B&B in exchange for a 23% stake.

In addition, financier Clive Cowdery who runs Resolution investment group, walked away from a deal with B&B after he planned to pump £400 million into the troubled UK lender.

B&B, among other UK banks including HBOS, Royal Bank of Scotland and Barclays, have all sought to raise extra cash after being hit by the credit crunch.

B&B is due to announce its first-half results later this month.

In early trading today, shares in B&B gained 0.5p to just over the rights issue price at 55.25p.

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