UPDATE: 23 October 2010, the proposals for the transfer of Kent Reliance KRBS to the new KRPS have now been published. Click here to read why we will be voting against the proposals.
It has been reported that the Kent Reliance Building Society, KRBS, sponsor of the Gills and Priestfields stadium, is in takeover talks with the US company JC Flowers. It is suggested that JC Flowers will invest £50million for a 49% stake in the business but that as this is not a full takeover it will not generate windfall payments to members.
In its stock exchange announcement, the building society said the proposed deal with Flowers would "create a new corporate structure for the Kent Reliance business."
This follows the controversial policies pursued by Chief Exec Mike Lazenby involving outsourcing admin processing to India and closing almost all the Kent Reliance branches.
The Daily Telegraph reports "As the boss of a mutual, , chief executive of Kent Reliance, is charged with running the company entirely for the benefit of its customers, with no external shareholders. Yet together they have devised the first private equity investment in a British mutual lender. The deal is being watched across the City and the regions since it could trigger a transformative impact on reform of the building society and banking sectors. "
One commentator said: "Flowers has been lucky with Lazenby who is not the standard mutual boss. He might find the others harder to convince."
The official announcement by KRBS says:
Kent Reliance Building Society today announces that it is in talks with J.C. Flowers & Co. to create a new corporate structure for the Kent Reliance business. If the new structure proceeds, it would allow for substantial new capital investment to support the business and would provide a means for the Society’s members to remain members of a mutual organisation.