Merger mania deepens among building societies

The proposed merger between the Halifax and Leeds building societies is expected to get the green light this afternoon following a postal ballot and separate general meetings for the societies' 10 million customers.

Leeds will hold its special general meeting in its home town this morning, followed by Halifax this afternoon. Thousands of customers are expected to attend, while the great majority will already have voted by post.

If, as expected, they give the merger the go-ahead the new society will hold a further vote in around two years' time in order to convert to bank status.

Floating as a plc will lead to the biggest share giveaway in UK history. Customers will receive on average pounds 1,000 each in the pounds 10bn flotation.

"Merger mania" in the sector continues unabated, with reports over the weekend that Alliance & Leicester is planning to offer about pounds 100 each almost immediately to National & Provincial customers.

A&L is the main rival to Abbey National in pursuit of N&P. About half a dozen institutions delivered sealed bids on Friday, including Abbey's bid for at least pounds 1.1bn. Abbey has stressed privately that if N&P rejects its bid and goes for merger with a society followed by conversion, like Halifax, N&P customers would have to wait for up to three years for any handout. The rumoured "jam today" payment by A&L would get around this, but no comment was available from the society yesterday.

Building society leaders warned last week at their annual conference in Birmingham that the banks were poised for a "duckshoot" of the remaining societies, following Lloyds Bank's successful takeover of Cheltenham & Gloucester. Nothing Anthony Nelson, the Treasury Minister, said to them at the convention calmed their fears, according to the majority view.

The Halifax and Leeds meetings today may well be noisy affairs, as they provide a focus for staff and customers unhappy with the deal. About 4,000 jobs may go from the combined 27,000 headcount, and the Leeds head office is unlikely to survive in its present form.

Serge Lourie and Peter Judge of the Halifax Action Group, representing customers unhappy with the merger, are standing for the Halifax board today. They say they will attend the meeting "holding proxies for a number of shareholders".

Halifax members will first vote on the merger at the special general meeting, and then at an annual general meeting directly afterwards will elect members of the board.

Mr Lourie said key subjects to be discussed would be the possibility of reduced service because of branch closures, job losses, and the slow pace of voting on the proposed conversion to a plc.

Under the merger proposals, the Building Societies Commission will confirm the deal at the end of June, and the two societies will merge on 1 August. Another round of voting will be needed on the conversion to plc, which will happen a number of months before actual conversion. Halifax expects this is around two years away, although it could be late 1996 or early 1998 depending on stockmarket conditions.

Mr Lourie commented: "In our opinion the merger is not going to benefit investors, borrowers or staff. The timetable is far too slow and we have been inundated with enquiries from investors who resent the fact that their money is going to be "locked in" for up to two years.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Voices
Ed Miliband, Nick Clegg and David Cameron appeal to the audience during the Question Time special
voices
Sport
Danny Jones was in the Wales squad for the 2013 World Cup
rugby leagueKeighley Cougars half-back was taken off after just four minutes
Life and Style
Google celebrates Bartolomeo Cristofori's 360th birthday
techGoogle Doodle to the rescue
Life and Style
The original ZX Spectrum was simple to plug into your TV and get playing on
techThirty years on, the ZX Spectrum is back, after a fashion
News
Tiger Woods and Lindsey Vonn are breaking up after nearly three years together
peopleFormer couple announce separation in posts on their websites
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
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

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living