C&G forced to hold extra meeting

A pressure group claiming to represent thousands of disaffected Cheltenham & Gloucester customers has forced the building society to hold an additional general meeting for members to discuss claims that Lloyds Bank is buying it on the cheap.

The success by the C&G Alternatives group represents the biggest problem in the path of the proposed £1.8bn takeover of C&G by Lloyds Bank since the High Court forced a rethink last year on how C&G customers should be paid.

The vital vote by members on whether to accept the Lloyds deal is about to be held at a general meeting at the London Arena on 31 March. C&G management is livid that the issue is being clouded by the unexpected additional meeting.

Andrew Longhurst, chief executive, said organising the additional meeting and informing the 1.2 million members would cost £0.5m, and would delay voting on the deal.

"It is a total waste of money to have to call an additional meeting, for just 100 or so members, when they already know that one is being held on 31 March," he said.

A spokesman for C&G Alternatives, Paul Rivlin, who claims to represent over 2,000 customers, was unrepentant. He thinks Lloyds should pay more, and that categories of customers such as borrowers, who stand to get nothing, should be included in the deal.

Mr Rivlin said: "Many thousands of C&G members are very unhappy with the board's proposals and would like a discussion before the simple resolution (on the deal) is put to them."

C&G revealed recently that it has already spent £7.5m on costs surrounding the deal. Mr Rivlin said that, in comparison, the £0.5m was "a drop in the ocean".

C&G yesterday said it had received 100 requisitions from customers, the minimum needed to require it to hold a special meeting. Notice of the meeting - giving time, date and venue, which have yet to be decided - will be sent to members within 28 days.

C&G Alternatives has put forward four resolutions for the meeting. One asks the board to identify a method of realising value for members, including flotation, which will benefit those who under the present terms will receive nothing. These include members who have been investors for less than two years or have not had a share account open continuously from December 1992, and borrowers.

Another resolution asks the board to identify a way of structuring the deal which benefits widows or widowers who are former joint account holders.

Another asks the board to negotiate a paper alternative to the proposed cash payments to members by Lloyds, which will enable members to defer capital gains tax liability.

Two resolutions were ruled inadmissable by C&G, one seeking views from borrowers, the other wanting to commission a merchant bank to supply an independent view on the deal.