(Reuters) – U.S. buyout firm JC Flowers could bid for four British customer-owned mortgage lenders as part of a plan to create a new “supermutual” that could be partly listed in London, the Observer newspaper reported on Sunday.
The West Bromwich, Skipton, Norwich & Peterborough and Principality building societies could all get bids from JC Flowers as it seeks to build a mutually-owned lender with a partial stock market listing modelled on France’s Credit Agricole (CAGR.PA: Quote, Profile, Research, Stock Buzz), the paper reported on Sunday.
JC Flowers declined to comment.
The buyout firm, founded by former Goldman Sachs banker Christopher Flowers, in August unveiled plans to take a 50 million pound ($78.48 million) stake in building society Kent Reliance, and said it expected to clinch similar deals with other mutual lenders.[ID:LDE672078]
Building societies left facing a capital shortfall by the financial crisis have found it more difficult than listed banks to raise fresh funds, as they cannot access public equity markets.
Funding pressures have driven a round of consolidation in Britain’s mutual banking industry, with sector leader Nationwide snapping up ailing rivals the Cheshire, Derbyshire and Dunfermline building societies over the last three years.
JC Flowers, a private equity firm focused on the financial sector, is best known in Britain for making an unsuccessful attempt to buy Northern Rock shortly before the stricken mortgage lender was nationalised in Feb. 2008.
The buyout firm in August bought 450 million euros ($626.1 million) of convertible bonds from Spain’s Banca Civica as the lender — one of seven to fail Europe-wide stress tests — became the first Spanish savings bank to use a new law allowing the sector to access private capital.
(Reporting by Myles Neligan; Editing by David Cowell)