Co-op pledges to fight off pounds 2bn `asset-stripping' bid

THE CO-OPERATIVE movement was up in arms yesterday after reports that a US finance house backed by a South African retail group is set to launch a pounds 2bn hostile bid for the Co-operative Wholesale Society (CWS).

Members of the movement stand to pocket windfall payments of up to pounds 2,000 if the bid comes off. Babcock & Brown, a private asset finance company based in San Francisco, is proposing to dismantle the CWS and sell its retail arm to Pepkor, the South African retailer that owns Poundstretcher.

Babcock & Brown and Pepkor were unavailable for comment. However, City sources indicate that the CWS's other operations, including banking, funeral parlours and travel agencies, could also be sold on.

The move echoes that of Andrew Regan two years ago, when the 31-year- old entrepreneur tried to bid for the CWS but failed, damaging his reputation and that of his City advisers, Hambros Bank, in the process.

A spokesman for the CWS said last night: "Let me make it very clear - CWS is not for sale. The board has a veto over the way the business is run, and it is rock solid behind the CWS management and chief executive Graham Melmoth, so we're not looking at a building society situation."

The spokesman was adamant that offering pounds 2,000 inducements to members would not work. He said: "We have had no contact with them [Babcock & Brown]. If any attempt were made to buy us, we would resist the attempt just as we did two years ago [with Mr Regan]."

The spokesman added: "We haven't received any approach at all, so as far as we're concerned there is no bid."

Brian Keelan, a corporate financier with SBC Warburg (now part of UBS) led the successful counterattack on behalf of the Co-op against Mr Regan. Mr Keelan is now running UBS's global leveraged finance business in New York, but is keeping a quiet eye on developments in the UK.

The CWS spokesman said they were not retaining any City advisers at the moment, although it was "too early to say" whether they would end up doing so.

Even with inducements of pounds 2,000 per member being offered, Co-op sources reckon the South Africans have "failed to do their homework". The Co-op is structured differently from a mutual building society, the spokesman pointed out.

Unlike a building society, any ownership decision does not rest with members but with the CWS's elected board. This has 28 members, drawn from 50 independent co-operative societies across the UK. That, together with a labyrinthine constitution and steadfast leadership from Mr Melmoth, should see off any predator, a spokesman said.

Another source in the Co-operative movement said: "The South African asset strippers are in for a hell of a fight."

PROMOTED VIDEO
Sport
Getty
News
Women have been desperate to possess dimples like Cheryl Cole's
people Cole has secretly married French boyfriend Jean-Bernard Fernandez-Versini after just three months.
Arts and Entertainment
AKB48 perform during one of their daily concerts at Tokyo’s Akihabara theatre
musicJapan's AKB48 are one of the world’s most-successful pop acts
News
Ian Thorpe has thanked his supporters after the athlete said in an interview that he is gay
people
News
The headstone of jazz great Miles Davis at Woodlawn Cemetery in New York
news
Arts and Entertainment
Brendan O'Carroll has brought out his female alter-ego Agnes Brown for Mrs Brown's Boys D'Movie
filmComedy holds its place at top of the UK box office
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
newsBear sweltering in zoo that reaches temperatures of 40 degrees
Arts and Entertainment
Professor Kathy Willis will showcase plants from the Royal Botanic Gardens at Kew
radioPlants: From Roots to Riches has been two years in the making
Extras
indybestThe tastiest creations for children’s parties this summer
Arts and Entertainment
TV The follow-up documentary that has got locals worried
Arts and Entertainment
Paolo Nutini performs at T in the Park
music
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

HR Advisor - 6 months FTC Wimbledon, SW London

£35000 - £40000 per annum + Benefits: Ashdown Group: HR Advisor - 6 Months Fix...

Information Security Manager (ISO 27001, Accreditation, ITIL)

£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

Biztalk - outstanding opportunity

£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

Trade Desk Specialist (FIX, Linux, Windows, Network Security)

£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...

Day In a Page

Super Mario crushes the Messi dream as Germany win the 2014 World Cup in Brazil

Super Mario crushes the Messi dream

Germany win the 2014 World Cup in Brazil
Saharan remains may be evidence of the first race war, 13,000 years ago

The first race war, 13,000 years ago?

Saharan remains may be evidence of oldest large-scale armed conflict
Scientists find early warning system for Alzheimer’s

Scientists find early warning system for Alzheimer’s

Researchers hope eye tests can spot ‘biomarkers’ of the disease
Sex, controversy and schoolgirl schtick

Meet Japan's AKB48

Pop, sex and schoolgirl schtick make for controversial success
In pictures: Breathtaking results of this weekend's 'supermoon'

Weekend's 'supermoon' in pictures

The moon appeared bigger and brighter at the weekend
Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

How Saudi Arabia helped Isis take over northern Iraq

A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

The evolution of Andy Serkis

First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

You thought 'Benefits Street' was controversial...

Follow-up documentary 'Immigrant Street' has got locals worried
Refugee children from Central America let down by Washington's high ideals

Refugee children let down by Washington's high ideals

Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
Children's books are too white, says Laureate

Children's books are too white, says Laureate

Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Blackest is the new black: Scientists have developed a material so dark that you can't see it...

Blackest is the new black

Scientists have developed a material so dark that you can't see it...
Matthew Barzun: America's diplomatic dude

Matthew Barzun: America's diplomatic dude

The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

Meet the 'Quantified Selfers'

From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

Five-star reviews are just the opening act for British theatre's first non-white artistic director

Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
Mrs Brown and her boys: are they having a laugh?

Mrs Brown and her boys: are they having a laugh?

When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor