Bristol & West ponders flotation

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The Independent Online
Bristol & West Building Society, the ninth-largest in the UK, yesterday signalled that it was preparing to abandon mutuality and follow the flood of societies moving towards plc status, writes Nic Cicutti.

One senior executive at Bristol & West said yesterday it was "considering all options". These included mutuality, but there was "no guarantee" that Bristol & West would remain so beyond next week.

Bristol &West executives have long held the view that they would be influenced in any decision by developments among other societies, including whether they were retaining their own mutuality, who they were merging with or being taken over by and the timing, which might determine a price for selling to a potential bidder.

Bristol & West's possible move to abandon mutual status follows plans by Northern Rock, the North-east society, to seek a pounds 1bn listing on the Stock Exchange next year.

Northern Rock's plans are the latest in a long line that has seen virtually every big society, including Halifax, Woolwich and Alliance & Leicester, succumb to rivals or seek to float on the stock market.

Bristol & West has about 1.2 million savings accounts and about 200,000 mortgage borrowers. Some experts believe that if it were to float alone, it might be worth some pounds 800m.

Banking analysts were yesterday unclear whether the society's plans involved a listing on its own or whether it was in takeover talks with another, larger institution.

A merger with a similar-sized society, such as Birmingham Midshires, prior to flotation was not ruled out.

One analyst, who refused to be named, said: "It is one thing for Northern Rock to go it alone. It is well run, with a dominant presence in the North- east. It may have thought that it had no choice but to de-mutualise and the five-year protection against being taken over if it floats would give it breathing space. But B&W is different. In the past, it has been burdened by debt and is still not very focused."