UKSA urges B&B shareholders to block fund-raising plan

Bradford & Bingley's minority investors have been urged to block the bank's fund-raising plan on hopes that Resolution, which dropped a rival proposal last week, could return to the table.

The UK Shareholders Association (UKSA) released a statement yesterday calling for the 930,000 small stakeholders to turn on the board at the extraordinary general meeting next week, following its refusal to consider Resolution's proposals.

A spokesman for the UKSA said B&B's board had not provided an adequate explanation for why the rival offer of a £400m investment was rejected, and had "unnecessarily" refused to open its books.

The UKSA encouraged minority shareholders, who own about 38 per cent of the mortgage bank, to show up to the meeting on 7 July, so they could pressure the B&B board for answers.

As well as anger over B&B's refusal to deal with Resolution, the shareholder group expressed concerns over TPG's proposed investment of £179m for a 23 per cent stake in the group. "We therefore suggest shareholders should consider ignoring the recommendation of the directors to vote in favour of the rights issue and the TPG investment," it said.

The group said rationale for the harder line was "because there appeared to be no alternative proposal available. But the situation now is somewhat different".

A source close to TPG said such a move would be like turkeys voting for Christmas. "There is only one deal on the table. If it is voted down, that's it. The UKSA says this is a bad deal for shareholders, but they could end up with shares that are worthless if no deal goes through."

The UKSA added shareholders should think carefully before voting against the proposals as "there is obviously no certainty Resolution would revive their proposal".