Coventry Building Society tables bid to remutualise Co-operative Bank
One of Britain’s biggest building societies has tabled a surprise takeover bid for the Co-operative Bank – a deal that would effectively remutualise one of the country’s most recognisable high street lenders.
Sky News can exclusively reveal that the Coventry Building Society has proposed a tie-up with the Co-operative Bank that would create a financial services powerhouse with close to £90bn in assets.
Talks between the two sides are understood to be progressing, although they are not yet being undertaken on an exclusive basis.
The Coventry’s intervention in the auction of the Co-operative Bank will surprise the industry, since the mutual had not been tipped as a likely bidder.
However, industry insiders said a combination of the two businesses would present a strong cultural and financial fit, while also delivering a huge boost to the cause of financial services mutuals in Britain.
A combined group would be comparable in size to Virgin Money, the London-listed banking group, and would have about five million customers.
The Coventry, which is being advised by the accountancy firm KPMG on the talks, is regarded by peers and regulators as having a credible management team, led by Steve Hughes, its chief executive.
Until last year, the society – the UK’s third-largest by assets – was chaired by Gary Hoffman, the veteran banker who rescued Northern Rock during the 2008 banking crisis.
A combined Coventry-Co-op Bank would be comparable in scale to Virgin Money
Nevertheless, a takeover on the scale of the Co-operative Bank would represent a hugely ambitious move for an organisation which has undertaken few sizeable corporate deals.
One source said the Coventry, which has about two million members, appeared to be “extremely serious” about a deal.
The price under discussion between the Coventry and the Co-operative Bank and their respective advisers was unclear on Wednesday.
Banking analysts have previously touted a price of approximately £800m for the Co-operative Bank.
A spokesman for the mutual said: “At Coventry Building Society, we remain open to opportunities that may enhance the value and services we offer to our current and future members, but we don’t comment on any public speculation.”
Combining the organisations would give the Coventry a major boost in the personal current account and business banking markets.
It was unclear on Wednesday what the fate of the respective brands would be after any deal.
The Co-operative Bank has also drawn interest from other suitors during an auction which kicked off earlier this year.
Shawbrook Bank tabled a predominantly paper-based offer, while Aldermore Bank withdrew from the process without submitting a formal proposal.
Regulators are being kept closely informed about the talks, with one bank analyst saying a takeover by the Coventry would vindicate the constructive approach taken by the Prudential Regulation Authority towards the Co-operative Bank as it encountered severe turbulence during the last decade.
If the Coventry was successful with a bid, it would effectively deliver the Co-operative Bank back into mutual ownership.
In 2013, the Co-operative Bank’s bid to acquire the branch network which became TSB was left in ruins when the scale of its own crisis emerged.
At the time, it was part of the wider Co-op Group, but was forced to turn to American hedge funds to secure a £1.5bn rescue, even as its former chairman, Paul Flowers, was left humiliated by tabloid revelations about his private life.
The lender then needed a further bailout by investors in 2017, with two major investors – Bain Capital Credit and JC Flowers – subsequently taking a 10% stake in the company.
The remainder of its equity is owned by a syndicate of hedge funds.
Earlier talks about a sale of the Co-operative Bank to Cerberus Capital Management, an often-controversial investor, broke down in December 2020.
In the autumn of 2021, the Co-operative Bank approached Spanish-owned TSB about a merger, but talks failed to progress.
PJT Partners and Fenchurch Advisory Partners are advising the Co-operative Bank on its sale process.
A spokesman for the Co-op Bank declined to comment.
UK car production fell by more than a quarter (27.1%) last month as a cyberattack at Jaguar Land Rover halted manufacturing at the plant, industry figures show.
The total number of vehicles coming off assembly lines – including cars and vans – fell an even sharper 35.9%, according to September data from the Society of Motor Manufacturers and Traders (SMMT).
“Largely responsible” for the drop was the five-week pause in production at Jaguar Land Rover (JLR) due to a malicious cyber attack, as other car makers reported growth.
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JLR’s assembly lines in the West Midlands and Halewood on Merseyside were paused from late August to early October as a result.
During this time, not a single vehicle was made. Production has since restarted, but the attack is believed to have been the “most financially damaging” in UK history at an estimated cost of £1.9bn, according to the security body the Cyber Monitoring Centre.
It was the lowest number of cars made in any September in the UK since 1952, including during the COVID-19 lockdown.
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Are we in a cyber attack ‘epidemic’?
Despite the restart, the sector remains “under immense pressure”, the SMMT’s chief executive Mike Hawes said.
The phased restart of operations led to a small boost in manufacturing output this month, according to a closely watched survey.
Of the cars that were made, nearly half (47.8%) were battery electric, plug-in hybrid or hybrid.
The vast majority, 76% of the total vehicles output, were made for export.
The top destinations are the European Union, US, Turkey, Japan and South Korea.
JLR was just the latest business to be the subject of a cyberattack.
Harrods, the Co-Op, and Marks and Spencer, are among the companies that have struggled in the past year with such attacks.
Championship club Sheffield Wednesday have filed for administration, according to a court filing, which will result in the already struggling side being hit with a 12-point deduction.
The South Yorkshire club currently sit bottom of the Championship, the second tier of English football, with just six points from 11 games.
Known as The Owls, Wednesday are one of the oldest surviving clubs in world football, with more than 150 years of history.
Court records confirm the club have filed for administration. A notice was filed at a specialist court at 10.01am.
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Sky’s Rob Harris reports on the news that Sheffield Wednesday have filed for administration
What has happened?
The Owls, who host Oxford United on Saturday, have been in turmoil for a long time.
On 3 June, owner Dejphon Chansiri, a Thai canned fish magnate who took over the club in 2015, was charged with breaching EFL regulations regarding payment obligations.
Sheffield Wednesday fans protest the ownership at a game away to Leeds United in January. Pic: Reuters
Weeks later, Mr Chansiri said he was willing to sell the club in a statement on their official website.
Sheffield Wednesday’s troubles have sparked furious protests from fans. Pic: PA
Their crisis deepened just days later when another embargo was imposed on the club relating to payments owed to HMRC, before players and staff were not paid on time on 30 June.
In the months that followed, forwards Josh Windass and Michael Smith left the club by mutual consent. Manager Danny Rohl, now at Rangers, also left by mutual consent.
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Frustrated Sheffield Wednesday supporters have targeted their embattled club’s owner in a highly-visible protest during their opening match of the season.
The Owls were forced to close the 9,255-capacity North Stand at Hillsborough after a Prohibition Notice was issued by Sheffield City Council.
‘Current uncertainty’
On 6 August, the EFL released a statement, saying: “We are clear that the current owner needs either to fund the club to meet its obligations or make good on his commitment to sell to a well-funded party, for fair market value – ending the current uncertainty and impasse.”
On 13 August, the Prohibition Notice was lifted, but a month later, news emerged of a winding-up petition over £1m owed to HMRC.
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Last season, Wednesday finished 12th. They had already been placed under registration embargoes in the last two seasons after being hit by a six-point deduction during the 2020/21 campaign, for breaching profit and sustainability rules.
With a 12-point deduction, the Owls would be 15 points away from safety in the Championship.
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