Plans to create UK supermutual

| October 24, 2010 | 0 Comments
Plans to create UK supermutual

The Observer newspaper has today reported that US private equity firm, JC Flowers, might bid for four UK building societies as part of plans to create a new “supermutual”, that could be sold via a partial flotation.

It is believed that West Bromwich, Skipton, Norwich & Peterborough and Principality are being targeted.

However, JC Flowers could not immediately be reached for comment.

JC Flowers, led by Chris Flowers, is widely known in the UK for attempting to buy crisis-torn Northern Rock. However, it abandoned its offer after it sought to build a stake in embattled life insurer, Friends Provident.

In the meantime, the report comes as funding pressures have fuelled much consolidation in Britain’s mutual sector.

Recently, Coventry Building Society and Stroud & Swindon merged, creating a business with approximately 1.5 million customers and assets of more than £20 billion.

Furthermore, in February, it was revealed that Skipton Building Society was merging with loss-making rival Chesham.

Yorkshire Building Society has merged with Chelsea Building Society, while Scotland’s Dunfermline Building Society was hastily taken over by Nationwide more than 18 months ago, Cheshire and Derbyshire building societies have been swallowed up by the Nationwide.

Britannia Building Society merged with Co-operative Financial Services last year, while in June 2009, West Bromwich Building Society agreed a deal that saw the 160-year-old institution saved from collapse.

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