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Banking industry

Birmingham Midshires Building Society's Uncertain Future Amid Disagreement with Royal Bank of Scotland

Strategic Insights

— 1 min read

Birmingham Midshires Building Society is at a crossroads, awaiting a decision from Royal Bank of Scotland (RBS) regarding its agreement to be acquired by the bank. Despite the deal being signed last August, the Midshires has been unable to proceed with the acquisition due to RBS's unwillingness to release the society from its exclusivity agreement. This has left the society to explore alternative options, including discussions with Halifax Building Society and the possibility of a flotation on the London Stock Exchange.

Key Takeaways:

  • The Birmingham Midshires Building Society is stuck in a deal with Royal Bank of Scotland, awaiting a decision on its release from the exclusivity agreement.
  • The RBS deal, worth £630 million, was agreed upon last August but has not progressed due to the bank's refusal to release the Midshires from its agreement.
  • Halifax Building Society has made a £780 million offer to the Midshires, which it has been unable to discuss with Halifax executives due to the RBS agreement.
  • The Midshires' board is taking a "fresh look" at all its options, including considering proposals from third parties and discussions with Halifax.
  • The society's chief executive, Mike Jackson, revealed that the Midshires had drawn up a list of five possible partners, with RBS being the only remaining option.
  • Individual shareholders have questioned the society's decision to pursue a partnership, arguing that it would lead to increased mortgage rates and lower interest rates for savers.
  • Britannia Building Society's chairman, Dr Calum MacLeod, stated that its members "understand mutuality, they like mutuality, and they belong to Britannia because they want to belong to a mutual building society."

Statistics:

  • The RBS deal with the Midshires was worth £630 million.
  • Halifax Building Society has made a £780 million offer to the Midshires.
  • The Midshires has been unable to discuss the Halifax offer due to the RBS exclusivity agreement.
  • The society has accrued millions of pounds in professional advisors' fees during the attempted partnership.
  • Britannia Building Society has a 1,000-strong panel of members who regularly pass on their opinions.

Sources:

  • "Birmingham Midshires' annual general meeting," The Birmingham Post.
  • "Britannia's annual meeting," The Independent.

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