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Commercial banks

Royal Bank of Scotland Clears Path for Halifax to Pursue Midshires Acquisition

Strategic Insights

— 1 min read

The Royal Bank of Scotland is expected to release Birmingham Midshires Building Society from an exclusivity agreement, allowing Halifax to make a formal offer. This development follows weeks of deadlock and paves the way for the building society's members to receive a potential additional £150 each if the deal goes through. Halifax had previously made a £780m offer for Midshires in March, and analysts suggest other bidders, such as Barclays and Lloyds TSB, could still emerge. The move also ends speculation surrounding the succession of Royal Bank's chairman and chief executive.

Key Takeaways:

  • Royal Bank of Scotland will release Midshires from an exclusivity agreement signed in August, allowing Halifax to make a formal approach.
  • Midshires will pay the bank a £5m "escape fee" to terminate the agreement.
  • Halifax will receive an additional £10m from Midshires if the building society falls to them.
  • Midshires' members will each receive an additional £150 if the Halifax deal goes through.
  • Analysts believe other potential bidders, such as Barclays and Lloyds TSB, could emerge.
  • Royal Bank dismissed reports of a split between Viscount Younger, its chairman, and George Mathewson, its chief executive, over the line of management succession.
  • The bank stated that relations between the two are excellent, and speculation about succession is premature.
  • Halifax had previously made a £780m offer for Midshires in March.

Statistics:

  • £630m: The size of Royal Bank's bid for Midshires.
  • £5m: The "escape fee" Midshires will pay to Royal Bank to terminate the exclusivity agreement.
  • £10m: The additional amount Royal Bank will receive from Midshires if the building society falls to Halifax.
  • £100m (£150 x 666): The total potential payout to Midshires' members if the Halifax deal goes through.
  • £780m: The size of Halifax's offer for Midshires in March.

Sources:

  • "ROYAL Bank of Scotland will this week clear the way for Halifax to make a formal approach to Birmingham Midshires Building Society when the Scottish bank releases Midshires from an exclusivity agreement signed last August." - The source did not specify a publication date.
  • "Royal Bank dismissed reports of a split between Viscount Younger, its chairman, and George Mathewson, its chief executive, over the line of management succession." - The source did not specify a publication date.

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