Defensive Woolwich set to mount dual takeover

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The Independent Online
Woolwich Building Society is preparing to mount dual takeover bids on a building society and a life company as part of a rapid expansion strategy ahead of its planned pounds 3bn stock market flotation. Among the institutions it has held talks with are Birmingham Midshires and NPI, the mutual insurer.

Woolwich hopes to make at least one announcement concerning a UK society or an insurer ahead of its demutualisation next year.

A separate acquisition in Europe is also likely in the next few months. However, any takeover would not be completed until after Woolwich's flotation.

Its moves were yesterday seen by some City analysts as helping to stave off the advances of rival predators, including Prudential, which are believed to be considering their own takeover bids for Woolwich.

But it also reflects the view of its newly appointed chief executive, John Stewart, that Woolwich must expand in the UK and in Europe to become an all-round financial services player. Mr Stewart yesterday declined to comment on details of the society's talks.

"What we are trying to do at Woolwich is wrap financial services round the customer and his needs, be that in the field of life and pensions, general insurance, protection, savings, loans, or plastic cards.

"When you move in that direction, you will realise there are gaps. You don't need to be a rocket scientist to work out areas in which we need to grow."

Mr Stewart stressed Woolwich was determined not to mount hostile bids for another society or a life company. The aim of talking to an insurer would be to build on the activities of Woolwich Life, the society's subsidiary, potentially linking up with a specialist pensions provider.

It is understood that talks on building society mergers have not been exclusive to Birmingham Midshires.

Similarly, while Woolwich believes NPI would be a good "fit", the insurer might not wish to have more detailed discussions. Talks with other mutuals are thought to be at a more advanced stage.

A Midshires spokesman said: "Rumours will be rumours. But do not hold your breath for an announcement because there will not be one this week or the next."

The stumbling block is thought to be a refusal by Mr Jackson to consider a subservient position in a merged organisation after five years at the helm of Midshires.

Laurie Edmans, marketing director at NPI, said: "It is flattering that Woolwich think so well of us.

"We have had conversations, but I would not dignify their status as talks."