If 25% of KRBS members vote NO then the deal will be blocked so please use your vote.
"the biggest winner by far in this deal is JC Flowers .... members’ welfare would be very much a secondary concern"
A few quotes from different websites about the deal by JC Flowers to takeover Kent Reliance Building Society. These are not my quotes but are collected from various websites and are primarily from respected commentators.
Norwich & Peterborough Building Society has denied claims that it will be joining JC Flowers as part of its plans to create a ‘supermutual'. “Unlike Kent Reliance, we are well capitalized and a financially strong business, therefore we have no reason to join JC Flowers as part of a supermutual.”
You can't accuse Kent Reliance Building Society's directors of not being prepared to think outside the box. An aggressive growth strategy under Lazenby has come back to haunt it in the past couple of years, leaving the mutual with a loss-making mortgage book and a commercial property loan portfolio of dubious quality.
the board fully accepted that there is the potential for losing independence by accepting the equity investment, losing control of the bank and of the industrial and provident society's percentage shareholding being reduced to a level that the ethos of mutuality is no longer sustainable.
“My initial reaction is one of caution. Venture capitalists are usually a pretty mercenary bunch who focus primarily on how much money they can make...So make no bones about it, JC Flowers would be entering into any deal primarily to make money for itself. I believe members’ welfare would be very much a secondary concern.”
But the biggest winner by far in this deal is JC Flowers. It has effectively paid £50 million for 40 per cent of Kent and it could see its stake increase further if Kent's £130 million commercial property loan book makes further losses. US private equity firm JC Flowers is lining up bids for at least four building societies to create a “supermutual” which would be partially floated in five years
Friday 29 October 2010
Monday 25 October 2010
Support Growing to Reject JC Flowers Offer for Kent Reliance Building Society
Support is growing for the campaign to reject the deal proposed by JC Flowers to take over the Kent Reliance Building Society (KRBS). Members of KRBS are unhappy that the terms of the deal will give control of the Kent Reliance to the private equity company along with an excellent return on their investment while members get no benefit from the deal.
The members of KRBS need to get at least 25% of the votes cast in order to block the deal which is looking possible from the number of contacts received since the ballot papers were posted at the weekend. Members have until 19th November to decide how to cast their votes despite the board considering the proposals for over 6 months.
The proposal would give a new society Kent Reliance Provident Society (KRPS) 60% of the new bank with 40% given to private equity firm JC Flowers in return for £50 million of new capital. However details hidden in the voting pack documents show that this new bank is likely to be 75% owned by JC Flowers with only 25% for members of Kent Reliance as the board of KRBS predict that they will immediately need further additional funds to offset losses in their commercial loans book.
The proposed deal gives JC Flowers a return of up to 8% dividend per year on their shares in the new bank along with a 20% return on their money if they decide to sell in future.
Members of the KRBS are getting "up to 0.1%" on their easy access savings accounts or 1.02% on their ISA savings so this deal offers nothing to them especially compared to the returns that the JC Flowers private equity fund is making on their investment.
Note for Editors:
Kent Reliance is the only building society based in Kent which includes the Chatham Reliance (established 1898), Dover District (established 1861) Herne Bay (established 1888) and Kent and Canterbury (established 1847). Kent Reliance Building Society has been a long standing mutual society serving mainly Kent through its network of branches. In recent years the local branch network has been closed as the business has concentrated on postal accounts, many of the back office duties have also transferred from Chatham to India.
The members of KRBS need to get at least 25% of the votes cast in order to block the deal which is looking possible from the number of contacts received since the ballot papers were posted at the weekend. Members have until 19th November to decide how to cast their votes despite the board considering the proposals for over 6 months.
The proposal would give a new society Kent Reliance Provident Society (KRPS) 60% of the new bank with 40% given to private equity firm JC Flowers in return for £50 million of new capital. However details hidden in the voting pack documents show that this new bank is likely to be 75% owned by JC Flowers with only 25% for members of Kent Reliance as the board of KRBS predict that they will immediately need further additional funds to offset losses in their commercial loans book.
The proposed deal gives JC Flowers a return of up to 8% dividend per year on their shares in the new bank along with a 20% return on their money if they decide to sell in future.
Members of the KRBS are getting "up to 0.1%" on their easy access savings accounts or 1.02% on their ISA savings so this deal offers nothing to them especially compared to the returns that the JC Flowers private equity fund is making on their investment.
Note for Editors:
Kent Reliance is the only building society based in Kent which includes the Chatham Reliance (established 1898), Dover District (established 1861) Herne Bay (established 1888) and Kent and Canterbury (established 1847). Kent Reliance Building Society has been a long standing mutual society serving mainly Kent through its network of branches. In recent years the local branch network has been closed as the business has concentrated on postal accounts, many of the back office duties have also transferred from Chatham to India.
Kent Reliance Takeover (Kent Reliance Building Society) On BBC News
BBC South East Today ran a story on the Kent Reliance takeover by JC Flowers today and did a short interview with me. Unfortunately they didn't use much of the material we recorded but hopefully the piece they showed will keep the issue in the media.
There is a press conference by KRBS tomorrow (Tuesday) in Rochester so more news may be forthcoming about the details in the Transfer document and why they have not given out the full facts in the summary of the proposals.
There is a press conference by KRBS tomorrow (Tuesday) in Rochester so more news may be forthcoming about the details in the Transfer document and why they have not given out the full facts in the summary of the proposals.
Kent Reliance Transfer to One Bank - JC Flowers Private Equity Deal
Some rather interesting information has come to light from web sources regarding this deal by Kent Reliance.
One of JC Flowers reported other targets has said:
“Unlike Kent Reliance, we are well capitalized and a financially strong business, therefore we have no reason to join JC Flowers as part of a supermutual.”
Another site says
"The deal is likely to prove controversial, given founder Chris Flowers's reputation as a tough deal maker with no previous interest in mutuality."
One of JC Flowers reported other targets has said:
“Unlike Kent Reliance, we are well capitalized and a financially strong business, therefore we have no reason to join JC Flowers as part of a supermutual.”
Another site says
"The deal is likely to prove controversial, given founder Chris Flowers's reputation as a tough deal maker with no previous interest in mutuality."
Sunday 24 October 2010
Is KRBS Takeover good for investors?
Read the details of the transfer to find out if the Kent Reliance KRBS take over deal is good for investors - that is investors in KRBS not investors in JC Flowers (JCF). I have no doubt at all that this deal has been structured to be an excellent deal for JC Flowers - a 20% return guarantee and up to 8% interest on their shares is something I think we would all like to have!
Whether the takeover deal is good for savers and investors in KRBS is another matter. The following extracts may be of interest - page numbers relate to the main Transfer Document.
(p63) KRPS will hold 59.9% and JCF 40.1%, The boards view is that significant adjustment is likely to be needed at the time of investment but is not LIKELY to increase JCF holding to more than 75%.
So they expect that JCF could own 75% of KRPS at the time of the transaction!! How on earth can they be proposing a transaction that they already know (expect/anticipate) will be exceeeded or changed as soon as it happens? Surely the transaction should include all relevant information up front rather than buried in the details at page 63.
Changing from KRPS owning 60% to JC Flowers owning 75% is more than a little change in circumstances especially when it happens IMMEDIATELY not at some unspecified point in the future!
At this point JCF can appoint the majority of directors and therefore control the company! So within a few months of the transfer, KRPS will have no control over the assets and bank that they created. Some deal for the Private Equity company!! I don't blame them, they are only doing the best by their shareholders and investors, but the management of KRBS are being seriously remiss with hiding these details.
By voting for this deal you are likely to have no windfall and no assets owned by KRPS (KRBS) within a few months. KRPS will be just like every other bank - no more mutual society owned by its members for their benefit.
Kent Reliance Takeover (Kent Reliance Building Society) KRBS Takeover Why No Windfall
I hope a few more people realise the significance of what is being voted for. I've gone through the main document and there are some areas that have been very much glossed over in their summary. In addition the following was in The Observer newspaper on Sunday 24th October which presumably is based on the KRBS vehicle doing the bidding.
American private equity group JC Flowers is lining up bids for at least four UK building societies as part of an audacious plan to create a "supermutual" that could be partially floated on the London stock market in five years. West Bromwich, Skipton, Norwich & Peterborough and Principality are in his sights; together, they have more than 1.7 million members, the Observer reports.
(p61) The board's view is that further preference shares will be issued to JCF at the time of investment as a result of writedowns in the commercial portfolio.
So the numbers given for shares owned by both companies are meaningless if further shares are being issued at the same time.
(p63) KRPS will hold 59.9% and JCF 40.1%, The boards view is that significant adjustment is likely to be needed at the time of investment but is not LIKELY to increase JCF holding to more than 75%.
So they expect that JCF could own 75% of KRPS at the time of transaction!! How on earth can they be proposing a transaction that they already know (expect/anticipate) will be exceeeded or changed as soon as it happens? Surely the transaction should include all relevant information up front rather than buried in the details.
Changing from KRPS owning 60% to JCF owning 75% is more than a little change in circumstances especially when it happens IMMEDIATELY not at some unspecified point in the future!
At this point JCF can appoint the majority of directors and control the company! So within a few months, KRPS will have no control over the assets and bank that they created. Some deal for the Private Equity company!! I don't blame them, they are only doing the best by their shareholders and investors, but the management of KRBS are being seriously remiss with hiding these details.
In my view these are significant points and the board are being extremely secretive, one could even say deceptive, by not publicising these as they relate directly to the situation at the time of the transfer.
American private equity group JC Flowers is lining up bids for at least four UK building societies as part of an audacious plan to create a "supermutual" that could be partially floated on the London stock market in five years. West Bromwich, Skipton, Norwich & Peterborough and Principality are in his sights; together, they have more than 1.7 million members, the Observer reports.
(p61) The board's view is that further preference shares will be issued to JCF at the time of investment as a result of writedowns in the commercial portfolio.
So the numbers given for shares owned by both companies are meaningless if further shares are being issued at the same time.
(p63) KRPS will hold 59.9% and JCF 40.1%, The boards view is that significant adjustment is likely to be needed at the time of investment but is not LIKELY to increase JCF holding to more than 75%.
So they expect that JCF could own 75% of KRPS at the time of transaction!! How on earth can they be proposing a transaction that they already know (expect/anticipate) will be exceeeded or changed as soon as it happens? Surely the transaction should include all relevant information up front rather than buried in the details.
Changing from KRPS owning 60% to JCF owning 75% is more than a little change in circumstances especially when it happens IMMEDIATELY not at some unspecified point in the future!
At this point JCF can appoint the majority of directors and control the company! So within a few months, KRPS will have no control over the assets and bank that they created. Some deal for the Private Equity company!! I don't blame them, they are only doing the best by their shareholders and investors, but the management of KRBS are being seriously remiss with hiding these details.
In my view these are significant points and the board are being extremely secretive, one could even say deceptive, by not publicising these as they relate directly to the situation at the time of the transfer.
Saturday 23 October 2010
Why We Will Vote Against the KRBS/Kent Reliance Building Society Takeover by JC Flowers
The documents proposing the transfer of Kent Reliance Building Society to a new company with Private Equity investment by JC Flowers have now been sent out.
I urge any member to read the document carefully. Although a complicated legal document it contains a number of very key points and some information that is critical to understand. Importantly read the section about Disadvantages listed by the Directors, the crucial ones being:
1) Loss of control of the bank by KRPS
2) KRPS shares will reduce so mutuality is no sustainable
Based on the information in the document we will be voting AGAINST the proposal.
The deal guarantees a return of 20% per year to JC Flowers
JC Flowers could potentially become the majority owner of the new bank very quickly
Mutuality is quoted but is effectively being given up to a private equity partner
More information about the KRBS Kent Reliance takeover is on the Rainham History website
I urge any member to read the document carefully. Although a complicated legal document it contains a number of very key points and some information that is critical to understand. Importantly read the section about Disadvantages listed by the Directors, the crucial ones being:
1) Loss of control of the bank by KRPS
2) KRPS shares will reduce so mutuality is no sustainable
Based on the information in the document we will be voting AGAINST the proposal.
The deal guarantees a return of 20% per year to JC Flowers
JC Flowers could potentially become the majority owner of the new bank very quickly
Mutuality is quoted but is effectively being given up to a private equity partner
More information about the KRBS Kent Reliance takeover is on the Rainham History website
Wednesday 20 October 2010
Ward Homes re-developing former offices on Ash Tree Lane Chatham
Ward Homes will be re-developing the grounds of its former offices on Ash Tree Lane in Chatham shortly. The development, named ‘Capstone Heights’ is set against the backdrop of the spectacular Chatham countryside and new homes will take full advantage of these views. Planning approval has been granted for 55 houses and apartments.
Ward Homes is investing in the local area around the development. Particular attention will be paid to traffic calming measures and pedestrian safety, and to improving equipment on the nearby Luton recreation ground. The land to the south-east of the development is designated an Area of Local Landscape Importance. To uphold this, the architecture of the properties will blend in with the natural landscape.
For further information, please visit www.wardhomes.co.uk
Frances Clark
Marketing Manager
Ward Homes Limited
A trading name of Barratt Homes Limited
T: 01959 568439
F: 01959 568488
M: 07793 581954
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