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Barclays under pressure to make clear its bid intentions for B&B

Susie Mesure
Monday 29 July 2002 00:00 BST
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Barclays will come under pressure this week to clarify its position on Bradford & Bingley, the mortgage bank, when it reports its interim results.

Speculation that the banking giant is keen to bid for the specialist financial services group heightened after it emerged that the two parties had held talks. A takeover approach is thought to have valued B&B at about £2.5bn.

Any deal would have to have the blessing of B&B's chief executive, Christopher Rodrigues, because the former building society is currently protected from a hostile takeover. B&B demutualised in July 2000 and floated on the stockmarket five months later. Under the terms of its transformation, would-be predators are barred from making a hostile bid until December 2005.

A spokeswoman for B&B refused to comment on rumours, but added: "We will confirm that we are not in any discussions at the current time." Barclays also declined to comment.

It is not known whether the £2.5bn approach was in shares or cash. The banking sector has seen stockmarket valuations tumble in recent months over City concerns at rising bad debts. Half–year profits at Barclays, which is due to report on Thursday, are expected to fall to £1.7bn from £1.9bn, analysts at Schroder Salomon Smith Barney said.

B&B, which has refocused its business to become a distributor for mortgages produced by other lenders, believes that bidders will be attracted by its combination of banking and advisory business.

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