TSB's agency deal with N&P collapses

A DEAL between TSB and National & Provincial Building Society to join forces in the estate agency business has broken down.

A dispute over the value of the businesses - at a time when estate agencies are still making losses and several large agency chains are up for sale - led to the calling off of talks between the two groups.

The parties signed an agreement in April to form a joint venture company to manage TSB's 133 agencies for several years, ending in the bank selling the agencies to N&P. Analysts estimated that the deal would have cost N&P between pounds 5m and pounds 10m.

N&P wanted a partnership with an agency to increase the number of outlets through which it could sell financial services, Alastair Lyons, the society's finance director, said. About the decision to scrap the talks, he said: 'We considered the underlying worth of the business and the levels at which other similar transactions are taking place at the moment.'

Abbey National's loss-making Cornerstone agency, with 355 offices, is still for sale, while Yorkshire Building Society put its 31-branch agency on the market earlier this month.

'There is no doubt people are having trouble selling them,' John Wriglesworth, an analyst at the UBS securities house, said. 'If we are truly at the bottom of the housing market, it is the wrong time to get out of estate agency.'

N&P would continue to seek an estate agency partner but did not want to own one, Mr Lyons said. TSB said its agency was not for sale, although it would consider propositions.