Bristol & West takeover

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The Independent Online
Bristol & West Building Society will announce today that it is abandoning its mutual status and will be taken over by Bank of Ireland in a deal worth an estimated pounds 600m-pounds 650m.

While the UK's ninth-biggest society and Ireland's second-biggest bank both refused to comment on "speculation," sources close to both institutions confirmed yesterday that the proposed deal would be announced today.

It will mean "windfall" payments to up to 1.4 million Bristol & West customers worth between pounds 750 and pounds 1,000. The UK's ninth-biggest society was forced to close its doors to new accounts last Thursday in a bid to stop thousands of speculators from clogging up its normal operations.

The society does not, however, have any plans to stop so-called "carpetbaggers" who did succeed in opening accounts recently from sharing in the windfall payments if the deal goes through.

City sources say Bristol & West in effect put itself up for auction several months ago, as the flight from mutuality gathered pace in the building society movement.

Northern Rock has just announced plans to float on the stock market while National & Provincial last week won approval from its members to sell to Abbey National.

The other interested parties looking at Bristol & West included Allied Irish Banks and National Australia Bank. Bank of Ireland and AIB have both been looking at UK societies for over a year, and have both bought UK mortgage books from former centralised mortgage lenders.

Other predators that are thought to have eyed Bristol & West include BAT and Prudential.

Bank of Ireland already has more than 20 branches in the UK and a direct mortgage operation, Bank of Ireland Mortgages.

Analysts pointed out last week that the bank will thus be expanding its UK mortgage presence just as the housing market is showing the first real signs of recovery in years.

The takeover will be subject to approval by the society's members, who will have to vote by a large majority in favour. Recent similar votes suggest that the deal will get overwhelming support, however, since the public now sees such bids simply as a source of cash bonuses.