C&G hits back at rebels in Lloyds takeover row

Cheltenham & Gloucester Building Society yesterday started mailing more than a million of its members with voting forms and details for the proposed takeover by Lloyds Bank - but is still refusing to name the day for an additional general meeting forced on the society by rebel customers opposed to the deal.

The rebel group, C&G Alternatives, succeeded in forcing an extra meeting two weeks ago after the minimum 100 members needed had petitioned for it.

Andrew Longhurst, C&G chief executive, insisted yesterday that what the rebels wanted - cash payments to borrowers and others who currently stand to get nothing - had been ruled unlawful by the High Court in April.

Mr Longhurst admitted yesterday that it might make sense to hold the extra meeting at the same time as the pre-arranged special general meeting on 31 March, at which the C&G's customers will vote whether to accept the £1.8bn offer from Lloyds.

Mr Longhurst said the rebels were insignificant compared to more than a million customers who would share the cash, which will average at £500 plus 13 per cent of the balance in their account.

C&G will retain its own identity and take over all Lloyds' existing mortgage lending, Mr Longhurst said. Lloyds currently does half the mortgage lending from its 1,800 branches that C&G does from only 230 offices, he added If the members vote in favour, the newly merged entity will have 6.5 per cent of the UK's total mortgage market, giving it a loan book worth £24.1bn.

Lloyds Bank's shares, which went ex-dividend yesterday, fell 19p to 556p. The bank restated that there are no plans for any issue of equity by Lloyds Bank in relation to the transaction.

Paul Rivlin, a spokesman for C&G Alternatives, said: "We are looking for a really convincing reason why the management should be determined to pursue the sell-out to Lloyds Bank.

"It would be reasonable for borrowers to expect a clear indication of future mortgage rate policy to give back the £500 they were promised last April, say a 1 per cent cut for a year."

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