Decision time arrives for N&P members

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The Independent Online
Hundreds of members of National & Provincial, the seventh-largest building society in the UK, are expected to attend a special general meeting this week to decide whether to accept a pounds 1.35bn takeover bid by Abbey National.

The meeting, in Manchester on Thursday, marks the climax to Abbey National's year-long campaign to convince N&P's 1.4 million members of the benefits of abandoning mutual status. Although those attending the Nynex Arena, where N&P's special meeting is being held, are likely to include a higher number against the deal, the outcome is expected to be determined by postal ballot.

At least 50 per cent of the million eligible savers must vote in favour, either at the SGM or by post, for the bid to succeed. Or those who vote in favour must hold at least 90 per cent, by value, of total members' savings balances. Among voting savers, 75 per cent must be in favour. Of borrowers who vote, only a simple majority must back the Abbey's bid. To sweeten the takeover, Abbey National is offering pounds 500-worth of its shares to all borrowers.

Savers who have been with the society for more than two years are being offered pounds 750 in cash or shares, plus 7 per cent of all eligible balances up to pounds 50,000. A joint saver and borrower could gain up to pounds 4,750 from the takeover.

N&P executives believe that they have won the argument, among those voting, in favour of the bid. But the society yesterday refused to say how many of its members cast postal votes by the deadline at midnight on Saturday, raising fears that a high number of abstentions may scupper the deal. However, an N&P spokesman said that since the takeover terms were published in July last year, the society had dealt with more than 100,000 letters from members with specific queries on the deal. At least 140,000 phone calls have been received on a special helpline set up by N&P.

"Since July last year we have sent out at least four mailings to our members and in the past few weeks we have carried out an extensive television campaign to encourage them to vote," he said.

The estimated cost of the campaign has been pounds 3m. The spokesman added that the main purpose of the mailings and the television campaign was to persuade members to vote, irrespective of their stance for or against de-mutualisation.

The vote marks the latest stage in a de-mutualisation fever that has seen virtually every leading building society, including Halifax, Woolwich and Alliance & Leicester, announce plans to float on the Stock Exchange.

Last week, Northern Rock became the latest to announce its pounds 1bn flotation plans. Bristol & West and Birmingham Midshires are also believed to be ready either to float independently or to be takeover targets.

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