24th May 2005 07:01
Britannia Building Society24 May 2005 24 May 2005 Britannia to buy Bristol & West savings business and branches for £150 million • Britannia to acquire Bristol & West's £4.5 billion savings book and 97 branches from Bank of Ireland • Step change in Britannia's scale with 850,000 new customers • First building society re-mutualisation gives ownership rights to Bristol & West customers • Customers and employees benefit from commitment to branch network Britannia, the UK's second biggest building society, is to buy the Bristol &West savings business and branch network from Bank of Ireland for £150 million.The consideration is subject to certain adjustments and payable in cash oncompletion. Bristol & West's 850,000 customers will become members of Britanniain the first re-mutualisation of a former building society. Bank of Ireland willretain the Bristol & West brand. Strategic Fit The Britannia Board believes there is compelling strategic logic for the deal,which offers substantial benefits to Britannia's members, customers andemployees and to the customers and staff of Bristol & West. It marks a step change in the scale of the business, which will grow by a thirdin terms of members, savings balances and branches. The customer base will growto three million, assets to £30 billion and the branch network to more than 250. The acquisition will provide Britannia with a platform for further growth.Bristol & West's branch network complements Britannia's network and theincreased customer base provides increased opportunities to offer a wider rangeof products, using Britannia's well developed customer management approach. The Bristol & West savings business being acquired generated operating profitsof £16 million (before tax and the allocation of Bank of Ireland central costs)in the year ended 31st March 2005. It is expected that the acquisition will beearnings enhancing following the integration period. The Board of Britannia seesgreat scope to increase revenues by offering Britannia's competitive productrange through the Bristol & West branches. Cost savings will arise throughmerging branches, more efficient processing, systems integration and economiesof scale. Customer benefits Britannia will move in to 65 towns and neighbourhoods where it is not currentlypresent, with Bristol & West's focus on the South and West complementingBritannia's strong North West, Midlands, London and East Anglian profile. Thiswill offer new business opportunities, as well as added convenience forBritannia members. Bristol & West's customers will become members and co-ownersof Britannia. They will be transferred into Britannia accounts - most will bebetter off as a result and Britannia has pledged that none will be worse off. Britannia is committed to maintaining an extensive branch network and the dealmeans Bristol & West's customers will have access to nearly three times as manybranches. Where there are both Britannia and Bristol & West branches in the sameHigh Street, Britannia is proposing that they will be merged. Britannia willkeep open any branches that are more than one mile apart. Bristol & West'scustomers will also become eligible for Britannia's unique membership rewardafter two years. The deal is good news for Britannia and Bristol & West staff, with the combinedbusiness offering more opportunities and greater security. Every Bristol & Westemployee will be offered a new role and there will be no compulsoryredundancies. Commentary Announcing the deal, Britannia group chief executive Neville Richardson said:"This is great news for our members and our people and great news for Bristol &West's customers and its people. Strategic deals like this do not come alongvery often and it will significantly increase the size and scope of Britannia'sbusiness, delivering significant additional opportunities for growth." "This is the first major re-mutualisation in the United Kingdom, following thedemutualisation trend in the late 1990s. As a result Bristol & West's customerswill once again enjoy all the benefits of owning their savings providerincluding a commitment to keeping an extensive branch network, competitiverates, an annual share of profits and a one-member, one-vote constitution. Weare delighted to welcome Bristol & West's staff and customers, and look forwardto a successful future together." Other matters The transaction will be effected by a Court-approved asset transfer withcompletion expected to take place in the Autumn, subject to Court and FinancialServices Authority approval. Lehman Brothers acted as financial adviser toBritannia in this transaction. Clifford Chance were legal advisors. Ends Notes to news editors Britannia is the UK's second largest mutual building society, with 2.2 millionmembers, assets under management of more than £25 billion and 187 branchescountrywide. The deal will see the membership jump to three million, assets top£30 billion and branches increase to more than 250. In addition to the membership business, Britannia includes the Britannia CapitalInvestment Group of companies, comprising the intermediary lender Platform, themortgage processing business WMS, Britannia Treasury Services, BritanniaInternational and Britannia Commercial Lending. Bristol & West branches will be retained as Britannia branches in Basildon,Bedminster (Bristol), Bideford, Bridgwater, Bridport, Bristol Galleries,Bromley, Bude, Burnham, Cheltenham, Cheshunt, Chipping Sodbury, Clevedon,Clifton (Bristol), Crewkerne, Dorchester, Downend, Edgware, Enfield, Evesham,Farnham, Fishponds (Bristol), Gloucester, Henleaze, High Wycombe, Hoddesdon,Honiton, Keynsham (Bristol), Kingswood (Bristol), Knowle (Bristol), Liskeard,Maidenhead, Midsomer Norton, Moorgate (London), Nailsea, Newport (2), OldfieldPark (Bath), Oxford, Penzance, Poole, Portishead, Portsmouth, Romford,Salisbury, Shepton, Sherborne, Shirehampton (Bristol), Sidmouth, St Austell,Street, Tavistock, Teignmouth, Torquay, Trafalgar Square (London), TunbridgeWells, Warminster, Watford, Wellington, Wells, Westbury on Trym (Bristol),Weston Super Mare, Worcester and Yeovil. Towns and neighbourhoods where it is planned that existing Britannia and Bristol& West branches will be merged are: Baker Street (London), Barnstaple, Bath,Birmingham, Bournemouth, Brighton, Bristol City Centre, Cardiff, Carmarthen,Chelmsford, Chippenham, Croydon, Edinburgh, Exeter, Guildford, Hereford, Ilford,Kingston upon Thames, Newton Abbot, Northampton, Plymouth, Reading, Richmond,Solihull, Southampton, Southend on Sea, Swansea, Swindon, Taunton, Thornbury,Winchester and Worthing. Contacts for further information Neville Richardson Group Chief Executive Britannia Building Society Graham Leftwich Head of Corporate 01538 393075 / 07970 153 609 Communications [email protected] Britannia Building Society Gill Ackers Brunswick Group LLP 0207 404 5959 / 07974 982 382Eilis Murphy 0207 404 5959 / 07974 982 471 [email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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