Building society and Co-op Bank agree takeover terms
Coventry Building Society has agreed a potential takeover of The Co-operative Bank in a deal worth up to £780m.
The building society confirmed that it had reached an agreement on the key commercial terms with the bank’s owners.
The acquisition, which would see the building society take on the bank’s three million customers, would make it the UK’s seventh largest lender with assets of around £89bn.
The deal is subject to the two firms agreeing a contract and gaining approval from financial services regulators.
Coventry Building Society said the Co-op Bank would be integrated gradually over several years.
The deal would mean the return of the bank under a mutual ownership structure, which it last had more than 10 years ago when it was part of the wider Co-op Group.
It left the group in 2017 when it fell into financial difficulties before being rescued by American hedge funds and is now owned by a group of private equity investors.
'Right thing to do'
Steve Hughes, chief executive of Coventry Building Society, described it as an exciting moment.
“We’ve spent a lot of time evaluating this opportunity and believe it’s the right thing to do,” he said in a letter to customers.
The lenders said they were working together to firm up the arrangements of the deal and stressed there can be no certainty that an acquisition will happen.
The two firms will retain their current names and branding while they work to finalise the deal.
Co-op Bank has 50 branches across the UK with about 3,400 staff. In March, it said it was planning to cut about 400 jobs as part of efforts to cut costs.
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