Newspaper article The Journal (Newcastle, England)

B&B to Pay 'Success Fee' despite Collapse of Rescue Deal; in Association with RBS

Newspaper article The Journal (Newcastle, England)

B&B to Pay 'Success Fee' despite Collapse of Rescue Deal; in Association with RBS

Article excerpt

BANK Bradford & Bingley is set to pay a 'success fee' to investment bank Goldman Sachs despite the collapse of its rescue deal with private equity firm TPG, a report said yesterday.

The buy-to-let lender will pay the bank a basic fee for advising the board, as well as an additional fee once a new funding package is in place.

The fee will be paid despite the fact that the group had to change plans for its rights issue again last week after TPG withdrew its pounds 179m cash injection.

The news is likely to further anger shareholders who were already upset about the way the deal with TPG had been carried out.

TPG, formerly known as Texas Pacific Group, had been lined up to buy 23% of B&B, with another pounds 258m coming from a rights issue.

But it walked away after B&B was effectively flagged up as a greater investment risk by ratings agency Moody's.

Under the new plan, a group of B&B's largest shareholders, including M&G Investment Managers, Legal & General Investment Management, Insight Investment and Standard Life Investments, are backing an enlarged pounds 400m cash call. …

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