Alliance poised to win float approval

Click to follow
The Independent Online
The Alliance & Leicester expects to be given the go-ahead for its conversion plans at a special general meeting today despite the threat of protests from an action group, furious at the terms of the pounds 2.8bn flotation.

Protests from the action group will culminate in claims by Patrick Mountain, of Somerton, Somerset, that the decision by the society to treat all its members the same is illegal and an abuse of members' rights.

"It does appear that the members are entitled to share pro-rata in the levels of investments in surplus funds," Mr Mountain said yesterday. He cited the transfer document sent to the society's 2.4 million voting members to back up his claim.

Mr Mountain is angry that the society intends to give each voting member 250 shares worth at least pounds 1,000, a move which discriminates against customers who have large sums invested or who have been with the society for many years.

A retired businessman and a former agent of the society, he intends to vote against the flotation plans.

But the fury of the action group, which has thousands of members, is unlikely to scupper the society's move to become bank as more than 1.5 million of its 2.4 million eligible members have cast their vote by post.

"That volume of votes would indicate we've got a yes vote," a spokesman for the society said yesterday.

He disputed Mr Mountain's claim of illegality, saying there was no legal reason which the society should offer a pro-rata distribution of shares because it was giving away its reserves.

The society will count the votes at the special general meeting at the London Arena and expects to announce a "yes vote" by mid-afternoon. It needs 20 per cent of its investing members to vote and 75 per cent of those to vote in favour. It needs a simple majority from its eligible mortgage borrowers.

However, the uncertainty surrounding the publication of the draft Building Society Bill could throw a spanner in the works.

"There is a possibility, depending on when the bill is published, that it may cause a delay," the spokesman said.

The bill is expected to published soon and Angela Knight, the Treasury minister, is adamant that building societies which become banks should lose their protection against takeovers if they bid for other financial institutions.

This has angered Alliance & Leicester, which has made no secret of its ambition for acquisitions once its becomes a bank. It argues that Mrs Knight is taking the bill further than was originally intended.

The society also argues that it may have to rewrite its lengthy transfer document, which forms the basis of today's vote, if the law is changed.

Alliance & Leicester is the first of the converting societies to hold a special general meeting to approve its plans. Halifax, Woolwich and Northern Rock are holding their meetings in the new year.