Yesterday it formally withdrew its failed bid to buy the Leek Building Society and turn it into an Internet bank. Shares, which had been suspended at 13p since September when the bid was launched, collapsed to a near- low of 7.5p, leaving the market capitalisation down 42 per cent at pounds 7.5m, and the stock trading at a discount. In June, the company floated at 10p, raising a pounds 10m war chest for acquisitions.
Ken Murray, chief executive, said that while the company was actively seeking new acquisitions, it had also decided to start buying the hardware for an online bank. He hopes an early move into Internet banking will make members of his next building society target more likely to vote for a takeover.
"Had the Leek purchase gone ahead we would have launched an Internet bank, but we need not wait for a deal," Mr Murray said.
Last month, the Leek's members threw out Murray Financial's demutualisation approach by nearly three to one. Only 14 per cent of the membership voted for the windfalls promised by Mr Murray.
Mr Murray met shareholders over the past week to discuss the lessons of the Leek defeat and to steady their nerves while a new target is identified.
The company is trying to secure an agreed takeover, and will be keeping a close eye on the Portman, Skipton and Chelsea building societies. These are facing conversion votes from carpetbaggers.
Mr Murray also said he would approach a hostile bid differently in future, putting more effort into trying to identify members of the target society and contacting them directly. It was a constant complaint of Murray Financial that the Leek failed to communicate the details of its offer fairly to members.
Mr Murray said he wanted regulators to consider the issue. "Central to the Financial Services Act was the recognition that the best way to protect investors was by ensuring that they were provided with full and proper information prior to being asked to take important financial decisions," he said.Reuse content