Bradford Bingley 150M Deal with TPG

Bradford and Bingley to Seal Deal with TPG for £150 million

Bradford & Bingley bank is apparently trying to finalize a deal with private equity firm Texas Pacific Group (TPG) which will provide about £150m to the struggling UK bank.

This will come as a shock to a lot of people. The deal with TPG, is unprecedented and will involve modifying the bank’s previously announced rights issue.

Any profit warning by B&B would also raise concerns about the buy-to-let mortgage sector in the UK as a whole.

The rights issue price was fixed at 82p a share but it would appear that TPG and other institutions are to agree a price about 20% below this. Existing shareholders will provide £250m in addition to TPG’s cash.

B&B decided to take on this course of action as the rights issue looked like it would fail. For the full story see : http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/02/cnbradford102.xml

Monday morning should be interesting ! B&B has lost around 80% of its value in 2 years. See previous post for B&B charts