Halifax windfall payout gets all clear

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The Independent Online
A MILLION members of the Birmingham Midshires building society moved a step closer to a windfall of up to pounds 880m yesterday after the Government cleared the society's pounds 750m takeover by the Halifax bank.

Birmingham Midshires said that individual members will learn about the precise amount of their windfall at the beginning of November when the society is due to receive thetakeover documents.

It is expected that the society's 1.1m members will get Halifax shares worth between pounds 600 and pounds 800 each when the deal is completed in the spring.

Shareholders will have to vote on the Halifax takeover at a special meeting scheduled for 11 December in Birmingham.

Yesterday's decision by Peter Mandelson, Secretary of State for Trade and Industry, not to block the bid on competition grounds marks the end of a 13-month tussle for the control of the Birmingham Midshires.

Last August, the Royal Bank of Scotland agreed to buy the society for pounds 630m, but in March this year, Halifax trumped RBS's offer with a pounds 780m unsolicited bid.

However, Halifax, which converted into a bank last year, was prevented from opening talks with the society by an exclusivity agreement between Birmingham Midshires and RBS.

The stalemate was broken when the Yorkshire-based bank agreed to pay pounds 5m to scrap the agreement and compensate RBS.

The story took another twist when, after talks between the two boards, Halifax decided to reduce its original offer by pounds 30m to pounds 750m.

Birmingham Midshires has 112 branches and around 2,200 staff. In the first half of 1998, it posted a 22 per cent rise in underlying profits, boosted by a strong rise in mortgage business.

A spokesman for Halifax said yesterday that the bank was "pleased" with Mr Mandelson's decision.

He added that the society did not expect the takeover to be blocked on competition grounds.